Key Facts:
Around 2.5 million Australian investment properties could require a property-specific valuation due to the July 2027 CGT changes.
Opteon recorded a 30 per cent increase in enquiries in July, as investors seek clarity on how the changes could affect them.
Investor behaviour is already shifting, with softer demand for established investment property in some metropolitan markets and regional areas showing greater resilience.
Sydney, 26 August: More than two million Australian investment properties could require a property-specific valuation as owners prepare for capital gains tax changes taking effect from 1 July 2027, according to property valuation firm Opteon.
Opteon estimates around 2.5 million investment properties are potentially affected, comprising approximately 2.3 million residential properties and 250,000 commercial and agribusiness properties.
The changes will make the value of investment property at the transition point an important factor in determining future CGT outcomes.
Opteon Managing Director Australia and New Zealand Scott Chapman said the scale of the change meant property owners should start understanding their position now rather than waiting until the new rules commence.
“The ATO method applies a standard formula across the period you’ve owned the property, but property values don’t grow evenly year to year. If a property experienced most of its growth before July 2027 and then enters a flatter period, that formula may attribute more of the gain to the period after the changes take effect. For some investors, that could result in a significantly higher tax outcome than using a property-specific valuation that reflects what the property was actually worth at the transition date,” Mr Chapman said.
In one modelled scenario, a Hawthorn property owner was estimated to save more than $22,000 in capital gains tax by obtaining an independent valuation rather than relying solely on the proposed ATO apportionment method.
“That’s why investors need to understand how the two approaches could apply to their individual property. A valuation provides evidence of the property’s actual market value at that point in time, rather than relying on an assumed pattern of growth.”
Investor behaviour is already shifting
Opteon has already recorded a 30 per cent increase in enquiries in July, while its market data is showing softer investor demand for established residential property in some metropolitan markets.
“We’re seeing investors reassess their position and, in some markets, pull back from established residential property. That is starting to influence demand and values, although the impact varies significantly by market,” Mr Chapman said.
Opteon’s latest market analysis found mortgage-related activity had declined across most metropolitan markets, particularly on the east coast, while regional volumes had remained comparatively steady. Sydney and Melbourne have also been among the softer residential markets, while a number of regional markets and parts of Western Australia, Queensland and South Australia have remained more resilient.
What Opteon is seeing across Australia
According to Opteon’s July 2026 Property Pulse Check:
- Melbourne is among the softest capital-city markets, with dwelling values down 2.6 per cent over the June quarter and 0.9 per cent over the year, while regional Victoria rose 7.1 per cent annually.
- Sydney has also weakened, with metro conditions deteriorating through the quarter while regional NSW has continued to outperform, supported by relative affordability.
- Perth remains one of the strongest markets, with dwelling values up 23.9 per cent over the past 12 months, although activity has moderated and listings have increased.
- Adelaide has slowed sharply after a strong run, recording no growth in June, while regional South Australia continued to outperform the metropolitan market.
“The important point is that Australian property hasn’t moved in one direction. Some markets have already experienced very strong growth, while others are now flat or falling. That divergence matters under the CGT changes because a standard apportionment formula may not reflect when an individual property actually gained most of its value.”
Rental pressure could intensify in some markets
Mr Chapman said any sustained reduction in investor participation could also add pressure to already tight rental markets, particularly where housing supply remains constrained.
“Rental affordability is already under significant pressure in many capital cities. If investor participation falls and fewer rental properties are available in particular markets, that could add further pressure, although rents will ultimately be shaped by local supply, vacancy rates and what tenants can afford.”
Recent research has found that renting a unit now consumes more than half the take-home income of a worker earning $70,000 in every Australian capital city, with Sydney the most expensive at 69 per cent.
Mr Chapman said investors did not need to make rushed decisions, but should use the period before July 2027 to understand their property and seek the appropriate professional advice.
“With less than a year until the changes take effect, investors have time to prepare. The priority is understanding what your property is worth, how the rules may apply to your circumstances and having the evidence available when you need it,” Mr Chapman said.
Property owners should seek appropriate valuation and tax advice based on their individual circumstances.
