Valuations for Pre-1985 Properties
A historic tax exemption is coming to an end. Learn why long-term owners of pre-1985 (pre-CGT) properties must secure a certified valuation on 1 July 2027 to protect their family wealth.
For more than forty years, properties purchased before 19 September 1985 (known as **pre-CGT assets**) have enjoyed a sacred status under Australian tax law: a **complete exemption** from Capital Gains Tax. However, the landmark May 2026 Budget has officially scheduled the end of this grandfathered exemption.
The End of the Grandfathered Pre-1985 Exemption
Starting from 1 July 2027, pre-1985 properties will no longer be fully exempt from CGT. Instead, the government will tax these properties on any capital growth that occurs **after** the transition date. While you are not taxed on past gains, your property's value on 1 July 2027 becomes the new cost base boundary.
Why a 1 July 2027 Valuation is Mandatory
To establish the post-2027 growth margin, the ATO requires a clear starting point. Under the legislation, investors are presented with two valuation options, but only one offers absolute wealth protection:
The ATO Day Apportionment Method
If you do not secure a certified valuation on the transition date, the ATO will apportion your total capital gain linearly based on days held before vs. after 1 July 2027. If your property experienced its major growth cycle in the decades prior to 2027 (which is highly likely), this linear assumption will artificially inflate your post-2027 taxable gain, resulting in a massive, unfair tax bill.
The Certified Market Valuation Method (Highly Recommended)
By hiring a registered property surveyor to document your property's actual market value on 1 July 2027, you establish a legally compliant cost base. Every dollar of capital growth accumulated between 1985 and 2027 is permanently locked in as **tax-free wealth**. Only growth exceeding this 1 July 2027 valuation will ever be subject to CGT.
The Post-2027 Tax Plan: Indexation Defense
Once your 1 July 2027 valuation is established as the new cost base, any subsequent capital gain you make upon eventual sale will be calculated under the new post-reform rules. The cost base (anchored at the 2027 valuation plus any post-2027 capital improvements) will be compound-adjusted for CPI inflation.
This makes **flawless cost base record keeping** after 1 July 2027 mandatory. Every capital renovation, repair bill, and survey cost must be digitized and compound-inflated to shield your remaining equity from top-up tax floors.
Summary of Next Steps for Long-Term Owners
1. **Mark the Calendar:** 1 July 2027 is the transition date. Pre-book a registered surveyor 3-6 months in advance.
2. **Retain Historical Surveys:** Gather all previous property blueprints and inspection reports to assist your valuer in securing the maximum defensible valuation.
3. **Adopt Digital Bookkeeping:** Transition all property expenses to a secure SaaS platform like ReceiptClaimer to automatically model your future CPI adjustments.
Simulate Your Valuation Lock Impact
Estimate how your 1 July 2027 market valuation impacts your future CGT under different growth assumptions.
Open CGT 2027 SimulatorFree Tax Tools
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