Key Highlights

  • From 1 July 2027, capital gains that individuals make will face a new 30% minimum tax, a floor that is already law under the Tax Reform No. 1 Act 2026.
  • The exemption was spelt out when the legislation went to Parliament. "Recipients of certain government payments, such as the Age Pension and JobSeeker, will be exempted from the minimum.
  • The government's Budget tax explainer says recipients of means-tested payments are exempt "if they receive any payment in the financial year they realise the gain".
  • A technical paper from MLC, published on 29 June 2026, describes the test the same way.

From 1 July 2027, capital gains that individuals make will face a new 30% minimum tax, a floor that is already law under the Tax Reform No. 1 Act 2026. Pensioners are carved out. Anyone who receives a means-tested income support payment, such as the Age Pension, in the year they realise a gain is exempt. Self-funded retirees on low taxable incomes are not, so for them the timing of future asset sales now matters.

What the government has said about the exemption

The exemption was spelt out when the legislation went to Parliament. "Recipients of certain government payments, such as the Age Pension and JobSeeker, will be exempted from the minimum tax," Treasurer Jim Chalmers said in his second reading speech on 28 May 2026.

The government's Budget tax explainer says recipients of means-tested payments are exempt "if they receive any payment in the financial year they realise the gain".

A technical paper from MLC, published on 29 June 2026, describes the test the same way. The exemption applies to anyone who receives a means-tested income support payment at any time in the financial year.

How the 30% minimum tax works

It is not a 30% discount, and it is not a flat 30% rate. It is a floor. It applies only to the real, inflation-indexed part of a gain that accrues from 1 July 2027.

If a taxpayer's ordinary tax on that gain works out at less than 30%, the minimum tax tops it up to 30%. According to the Budget explainer, it has no effect on gains that are already taxed at 30% or more.

Growth that accrued before 1 July 2027 sits outside the minimum tax. For individuals, that earlier growth keeps the 50% discount through a deemed sale at market value just before the start date.

Why self-funded retirees are exposed

The floor bites hardest on people whose ordinary tax rate on a gain is low, and that often describes retirees who draw down savings rather than earn a salary.

Robyn Jacobson of the National Tax and Accountants' Association (NTAA) told Accountants Daily on 4 September 2026 that the minimum tax "is not confined to high-income taxpayers". She identified retirees, part-year residents and people with large deductions, such as personal super contributions, as among those who could be hit hardest.

Pitcher Partners said in May that, on the rates scheduled for 2028, taxpayers with taxable incomes below about $45,000 may pay extra to bring their gains up to 30%.

Hypothetical example: two retirees, one sale

Hypothetical example: two retirees each sell shares in the 2028–29 financial year and make a real, indexed gain of $20,000 that accrued after 1 July 2027. Assume that, under ordinary marginal rates, the tax on that gain works out to $2,000 for each of them, an effective rate of 10%.

The first retiree is self-funded and receives no government payment that year. The minimum tax applies: 30% of $20,000 is $6,000, so they pay a top-up of $4,000 on top of the $2,000. Total tax on the gain: $6,000.