Renovating Before You Sell: What the 2027 CGT Changes Mean for Sydney Homeowners

The 2027 CGT changes at a glance

So, what's actually changing?

From 1 July 2027, the 50% CGT discount disappears for new gains made by individuals, trusts and partnerships ^[1][3]. In its place, your cost base is indexed to inflation (as long as you've held the asset for 12 months or more), and there's a minimum 30% tax on capital gains ^[2][4].

The good news is it isn't backdated. If you own something on 30 June 2027, your gain is split in two. Everything up to that date is worked out the old way and keeps the 50% discount. Everything after uses the new rules ^[3][5]. One thing to know: indexation only starts counting from 1 July 2027, not from the day you bought ^[6].

New builds get special treatment. Investors in new residential builds can keep the 50% discount if they prefer ^[2][4]. And if you've owned something since before 20 September 1985, which used to be completely outside CGT, gains after 1 July 2027 will now be taxed ^[4][5].

Will this affect selling my family home?

Generally, no. The main residence exemption is exactly as it was ^[1]. According to the ATO, your home is fully exempt from CGT if you're an Australian resident and the home ^[7]:

• has been where you, your partner and any dependants have lived the whole time you've owned it
• hasn't been used to earn income, like renting it out, running a business from it or flipping it
• sits on 2 hectares of land or less

If you've rented it out, run a business from it or moved out for a while, it can get a bit more complicated and you might only get a partial exemption. Worth a chat with your accountant before you list.

Is the value I add before selling really tax free?

If your home is fully exempt, generally yes. Lived there the whole time? Then the whole gain on sale is usually covered by the main residence exemption ^[7], and that includes all the value you add by renovating, repairing and styling before you sell.

You can't claim the renovation costs on your own home as a tax deduction. But if the home is fully exempt, that doesn't really matter, because the gain isn't taxed anyway.

The one exception is flipping. The ATO is clear that a home "bought to renovate and sell at a profit" doesn't qualify ^[7]. Getting the home you've lived in ready to sell is a different thing, but it's always worth your accountant confirming it for you.

What if I'm selling an investment property?

If you sell after 1 July 2027, your gain comes in two parts. The part built up before that date keeps the 50% discount. The part after is taxed at a minimum of 30% ^[3][5]. When it comes to getting the property ready, three things are worth knowing:

• Improvements count. What you spend improving a property generally adds to its cost base, which reduces your taxable gain.
• Timing your valuation matters. The pre 1 July gain can be worked out with a market valuation or an apportionment method ^[5]. The National Tax & Accountants' Association suggests getting any valuation after 1 July 2027, not before, because an earlier one is really just a forecast ^[6].
• Negative gearing has changed, but maybe not for you. For established properties bought after 7:30pm AEST 12 May 2026, rental losses from 1 July 2027 can only be used against residential property income. Anything you owned before then is grandfathered, and new builds are unaffected ^[1][2].

Have a chat with your accountant before deciding when to sell or how much to spend.

Should investors rush to sell before 1 July 2027?

Not necessarily. The gain you've built up to 30 June 2027 keeps the 50% discount even if you sell later ^[3][6]. PwC puts it nicely: 30 June 2027 is "generally not a transaction deadline", it's more of a point to value and plan around ^[5]. Every situation is different, so get tax advice first.

Why we think Sydney homeowners will reinvest in their homes

Here's our view. When the tax rules make investment property less attractive, the home you live in becomes the smartest place to put your money. It's now one of the few big assets that stays completely tax free when you sell ^[1][7]. Every dollar of value you add to it is generally yours to keep.

We think four things will drive it:

1. Your home is now the tax free asset. The main residence exemption is untouched ^[1], while new investment gains face a 30% minimum tax from 1 July 2027 ^[1][2]. Adding $300,000 of value to your home is generally tax free. The same gain on an investment property won't be.
2. Investing in property just got harder. Anyone buying an established investment property after 12 May 2026 can only offset rental losses against residential property income ^[1][2]. Some of that money will find its way into the family home instead.
3. Moving is expensive, renovating adds value. On a $3 million Sydney home, NSW transfer duty alone is $146,287 ^[10], before agent fees and removalists. None of that adds a cent to what you own. Put that money into your current home and it goes straight into a tax free asset.
4. You get to enjoy it in the meantime. A new kitchen, better light or a reworked layout pays you back every day you live there, and again when you eventually sell.

That's why we expect more people to go one of two ways. Some will stay and renovate: extend, add a level, rework the layout or finally do the kitchen. Others will sell, but prepare properly first, because every extra dollar their home sells for is generally tax free.

Your home vs an investment property, after 1 July 2027

This is our take based on what we're seeing across Sydney, not a forecast or financial advice. Everyone's situation is different, so talk to your accountant about what makes sense for you.

How much difference does pre sale preparation make?

Quite a lot. We've prepared more than 140 Sydney homes from start to finish, with an average sale price 20% above reserve, and it takes us an average of 14 days from keys to launch ^[9]. Of course, every home, market and campaign is different.

A few of our recent results

What does pre sale preparation actually involve?

It's everything that gets your home ready for market: renovation, repairs, painting, organising the trades and styling, all managed as one project. Here's how we do it, in five steps ^[9]:

1. Consult. We walk through your home with you (and your agent, if you like) and get to know your goals and budget.
2. Strategise. We put together a plan that covers what's worth doing, and just as importantly, what isn't.
3. Manage. We look after every trade, supplier and access arrangement, so you don't have to.
4. Present. In goes the styling, artwork and all the finishing touches.
5. Deliver. Your home is ready for photography, launch day or moving in.

We work across Sydney's Eastern Suburbs and Lower North Shore, plus select projects across greater Sydney ^[9].

How Bettini & Co can help, whether you're staying or selling

We're a Sydney studio that looks after the whole job: design, renovation, trades and styling, with one team and one point of contact ^[9]. Here's what that looks like.

If you're staying and reinvesting

Our interior design service is made for homeowners who are staying put. Think custom layouts, architectural lighting and joinery, with us sourcing the permanent pieces, lighting and textiles, handling installation and finishing it all with art and styling ^[9]. Pair it with renovations like kitchen refreshes, bathroom upgrades and timber floor sanding, and our project management team runs the licensed trades, timelines and access for you ^[9].

If you're selling

Our pre sale preparation brings every trade, repair, painting job and styling under one contract ^[9]. Property styling uses furniture and art hire chosen for the buyers most likely to want your home ^[9]. And there's no upfront cost for trade repairs, painting or styling; you pay at settlement ^[9].

Want to know more? Have a look at our pre sale property preparation, renovations and interior design services.

Your questions, answered

This article is general information only and is not tax, financial or legal advice. Tax outcomes depend on your circumstances. Speak to a registered tax agent or accountant before making renovation, sale or investment decisions.