Cairns Economic Monitor - September 2026
The CGT reforms are legislated. Now comes the hard part: working out what they mean in practice.
The September edition of the Cairns Economic Monitor is now out, exploring latest economic changes in the labour market, inflation, interest rates, real estate, tourism and Michael's commentary about the practical implications of the new CGT discount reforms..
For assets held at 30 June 2027, gains will need to be split between the pre- and post-1 July 2027 periods. Taxpayers can use either a market value at the transition date or the prescribed apportionment method.
But there’s a potential sting in the tail.
The prescribed method assumes steady growth over the entire holding period. For assets that have grown significantly, this could understate the value created before 1 July 2027, potentially resulting in a higher tax bill.
The alternative? A market valuation.
But what happens when thousands of private businesses and investment properties all need to establish a valuation at around the same time? The legislation may be settled, but the practical challenges are far from it.
The next few months will be critical in determining whether workable valuation and substantiation solutions emerge.