Australian CGT Changes 2027: How Australia Compares Globally

Australia’s Post-budget CGT Regime vs the World

Editors note as at 1 June 2026. International tax rules change frequently. Please confirm the current tax rules and their application to your circumstances for any destination that you are seriously considering before making a relocation decision. We can assist with that analysis where required.

So the 2026 Budget happened. And if you’re an Australian investor, founder, or anyone who owns a few things that have gone up in value over the years, you’re probably wondering what just hit you.

Here’s the short version. From 1 July 2027, the 50% CGT discount disappears. In its place you get cost base indexation (the Tax Office will adjust your purchase price for inflation, which sounds nice until you do the maths). On top of that, a 30% minimum tax rate applies to your indexed gain. Doesn’t matter what your marginal rate would have been, you’re paying 30% as a floor.

Now, if you’re reading this article you’re probably not on a low income. You’re probably wondering what the change means for someone who actually has a salary, some wealth, runs a business, or is sitting on a long-term share portfolio. Let’s not be coy about it. For most people in that bracket, the 30% floor isn’t the relevant number. What’s relevant is your marginal rate, which is 47% (45% top rate plus 2% Medicare levy) once your total taxable income (including the gain) crosses $190,000.

So that’s the actual number. For a high-income earner selling a long-held asset after 1 July 2027, the taxman is taking 47 cents of every dollar of your indexed gain. Which prompts the obvious question.

How does that compare to anywhere else?

The short answer is: badly.

<p.Not in the regions Australians actually move to. Not for the kinds of things (founder exits, share portfolios, second homes, business sales) that drive serious wealth. And not in a way that anyone watching where capital actually flows has failed to notice.

This article walks through the comparison. Thirteen jurisdictions. Some you’d expect (Singapore, Hong Kong, Dubai). Some you might not (the Philippines, Vanuatu). All examined for what an Australian would actually pay if they relocated. Then a section on what this means for the country, and a section on what it means for the people quietly looking at international school websites.

A few things to get straight first

Three quick things before we start.

One. The changes aren’t law yet. Treasury announced them on 12 May 2026. They’re scheduled to apply from 1 July 2027. Until the legislation passes Parliament, the detail can shift. This article assumes the changes go through roughly as announced. If they don’t, the analysis changes. We’ll update.

Two. Tax comparisons across countries are imperfect. Countries tax differently in dozens of ways. Headline rates often miss the point. What this article tries to do is compare the after-tax outcome of selling a long-held asset (shares, a business, an investment property) in each location. That’s the bit that actually moves the needle for the kind of person who reads articles about international tax comparisons.

Three. This article is opinionated about consequences, not ideology. The government’s case for the changes is that the 50% discount mostly benefits the wealthy and that capital should be taxed more like income. Reasonable people can argue about that. What this article looks at is what happens when those policies meet reality, particularly the reality that smart people and wealthy people can move, and often do.

One more assumption to flag. The comparison numbers below assume you’re a high-income earner whose other taxable income already puts you in the top bracket. That’s the realistic scenario for someone running through this analysis. If you’re below the top bracket, scale the Australian numbers down. But the comparison still tilts against Australia for the asset classes this article covers.

What’s actually changing on 1 July 2027

For the full detail, see our flagship Budget article. Here’s the version that fits on one screen.

The 50% CGT discount is gone for gains accruing after 1 July 2027. In its place, your cost base gets indexed for inflation. Then your indexed gain is taxed at your marginal rate, with a 30% floor.

For a high-income earner, that 30% floor doesn’t matter. You’re paying 47%.

For comparison, under the current rules, the same high-income earner pays roughly 23.5% on a long-held gain (top rate of 47% applied to the discounted 50%). So the effective rate on long-term gains is doubling. From around 23.5% to 47%.

A few wrinkles worth knowing.

Indexation partially helps for assets held a long time during high inflation. But indexation only adjusts your cost base by CPI. For an asset that’s actually grown faster than inflation (which is the whole point), the old 50% discount was more generous.

The grandfathering matters. Gains that accrued before 1 July 2027 on assets you hold across that date still get the 50% discount on the pre-2027 portion. The new rules only apply to gains from 1 July 2027 onwards. So if you’ve got something with serious appreciation and you don’t want to take the new regime on the chin, there’s a planning window between now and 30 June 2027.

Three more things were announced separately. A 30% minimum tax on discretionary trusts from 1 July 2028. Negative gearing restrictions on residential property from 1 July 2027. And the main residence exemption isn’t changing, in case you were worried about your own home.

The headline comparison

Here’s the number to hold onto. After 1 July 2027, a high-income Australian selling a long-held investment asset pays 47% tax on the indexed gain.

Now here are the same numbers, in the same situation, in the destinations Australians actually consider:

• Singapore: 0%.
• Hong Kong: 0%.
• The UAE, including Dubai: 0%.
• Vanuatu: 0%.
• New Zealand on most asset classes (excluding residential property sold within 2 years): 0%.
• Malaysia on most personal assets: 0%, with conditions and a foreign-income exemption for residents that was extended in December 2024 from 31 December 2026 out to 31 December 2036.
• The Philippines: foreign-sourced income is generally outside the Philippine tax net for resident aliens, and asset-specific rates apply on Philippine-located assets (6% on real property, 15% on unlisted shares, 0.6% on listed shares).
• Thailand: 0% on offshore gains that aren’t remitted to Thailand (Thailand operates a remittance basis), with progressive rates up to 35% on remitted foreign income or Thai-source income. LTR visa holders in qualifying categories get exemption from Thai tax even on remitted foreign-source income.
• Indonesia: this is where the headline rate misleads. The famous 0.1% applies only to shares listed on the Indonesia Stock Exchange. Indonesia taxes residents on worldwide income, so for Australians selling foreign-listed shares (ASX, US, anywhere else) as Indonesian tax residents, gains are treated as ordinary income at progressive rates up to 35%. Indonesia is a high-tax jurisdiction for foreign capital gains, not a low-tax one.
• The United States: 0/15/20% at federal level plus 3.8% Net Investment Income Tax on long-term gains, plus state tax that ranges from zero in several states (Florida, Texas, Nevada and others) up to 13.3% in California.
• The United Kingdom after the October 2024 Budget: 18% basic rate, 24% higher rate on most gains.
• The European preferential regimes (Italy, Portugal, Cyprus, Greece, Malta) offer lump-sum or flat-rate options that, for the right kind of taxpayer, can deliver materially better outcomes than Australia.

So that’s the comparison. Australia at 47%. Most of the destinations Australians actually move to: 0%, or somewhere close to it. A few exceptions where headline rates mislead (Indonesia particularly), and a couple of higher-tax peers (UK, US). The cheapest comparable place charges less than half of what Australia will charge from 1 July 2027.

That’s the central observation. The rest of this article is detail.

The country-by-country breakdown

Singapore

Singapore does not tax capital gains on individuals. Not on shares (public or private), not on real property, not on digital tokens. The trading test under the Singapore Income Tax Act can recharacterise gains as business income if you’re actually running a trading business, but for ordinary investors, the rate is zero.

Income tax is progressive, with the top rate of 24% kicking in only above SGD 1 million of chargeable income. Foreign-source income is generally exempt for individuals (Singapore runs a territorial system). No estate duty, no inheritance tax, no wealth tax, no withholding tax on dividends. GST is 9%.

For Australian investors and founders, Singapore is the gold standard in the region. It’s the most tax-efficient developed financial centre within a sensible flight of Sydney. English-language professional services. Common law foundations. Direct flights everywhere. It’s where Australian-Asian-Pacific money tends to go when money moves.

Hong Kong

Hong Kong doesn’t tax capital gains at all. No CGT on shares, no CGT on property gains, no withholding tax on dividends or interest, no estate duty, no general value-added tax.

It runs on a territorial principle. Only income arising in or derived from Hong Kong is taxable. Salaries tax on Hong Kong-source employment income is calculated at the lower of progressive rates (2% to 17%) or the standard rate, which from 2024-25 is tiered at 15% on the first HKD 5 million and 16% above. Corporate profits tax is 8.25% on the first HKD 2 million and 16.5% above.

Worth flagging the obvious. Hong Kong’s tax position is genuinely outstanding. But the city’s political environment has changed substantially since 2020. For some Australians, that’s a dealbreaker. For others, it’s a trade-off they’re willing to make. The financial profile is what it is. The non-financial profile is what you make of it.

New Zealand

New Zealand doesn’t have a general capital gains tax. The bright-line test catches residential property sold within 2 years (reverted from a longer period on 1 July 2024). Shares, business sales, art, collectibles, most other capital assets: not taxed on disposal, provided you’re not actually running a trading business.

Personal income tax tops out at 39% above NZD 180,000. No payroll tax. GST is 15%.

Worth watching this space. The Labour Party has committed to a 28% capital gains tax on investment property as a 2026 election policy, applying from 1 July 2027 if Labour wins. The general election is on Saturday 7 November 2026. The policy is property-only (it excludes shares, businesses, the family home), so even if Labour wins and the policy lands, New Zealand’s broader no-CGT position survives. But the property piece matters for a chunk of Australians considering the move.

One other thing about New Zealand. The Trans-Tasman Travel Arrangement means Australians can move there without applying for a visa. No employer sponsorship. No skills test. No investment threshold. You board the plane and walk in. Even better, there’s a four-year temporary tax exemption for new tax residents on most foreign-source income, which is genuinely valuable for Australians moving over with portfolios still held in Australia.

We’ve written about all of this in detail in our dedicated New Zealand piece.

United Arab Emirates (including Dubai)

The UAE has no personal income tax and no capital gains tax on individuals. Dubai is the practical reference point for most Australians, but the federal position is what it is: zero. No inheritance tax, no wealth tax, no withholding tax on dividends.

Corporate tax was introduced in June 2023 at 9% on profits above AED 375,000 (about AUD 155,000), with Free Zone exemptions for qualifying activities. A 15% top-up applies to large multinationals (revenues above EUR 750 million) from January 2025. For Australians operating personally or through a small owner-operated business, none of that touches the personal zero rate.

VAT is 5%. Dubai real estate transfers attract a 4% registration fee. The Golden Visa offers 10-year residency for qualifying investors, professionals and entrepreneurs without serious physical presence requirements.

Dubai has gone from “weird outlier” to “obvious option” over the last decade. The combination of zero personal tax, direct flights to most Australian cities, English-language business environment, and a substantial Australian expatriate community has shifted what used to be a Singapore-or-London decision into a Singapore-or-Dubai-or-London decision.

United States

The US is the messiest case here because federal and state interact, and the short-term versus long-term distinction is sharper than most countries.

At federal level, long-term gains (assets held more than a year) are taxed at 0%, 15% or 20% depending on income. For a single filer in 2026, the 20% kicks in above USD 545,500 of taxable income. The 3.8% Net Investment Income Tax adds another layer for high earners. So the federal top rate on long-term gains is effectively 23.8%.

Short-term gains get taxed as ordinary income, up to 37%.

Then there’s QSBS. The Qualified Small Business Stock exemption under Section 1202 is the standout provision for tech founders specifically. For stock in a qualifying C corporation held more than 5 years, up to USD 10 million (or 10x basis) of gain can be excluded from federal tax entirely. For founders exiting venture-backed companies, this is the single most generous tax provision in the developed world.

State tax is where the picture varies wildly. Several states don’t impose a broad-based individual income tax at all. Florida, Texas, Nevada, Tennessee, Wyoming, Alaska, South Dakota. Washington has a separate 7% excise tax on certain large capital gains. New Hampshire has historically had a tax on investment income (its current position has been changing). California, at the other end, takes 13.3%. So an Australian moving to Texas pays 23.8% federal. An Australian moving to California pays 23.8% plus 13.3%, for a combined rate above 37%.

For Australian founders building US-headquartered companies, the QSBS provision alone can mean an effective 0% federal tax on a USD 10 million gain. Australia has nothing remotely like it.

United Kingdom

The UK changed significantly with the October 2024 Budget, and not in a way that’s friendly to wealth.

CGT rates were lifted from 10% and 20% to 18% and 24% on most assets. The previous distinction between residential property gains and other gains was eliminated. So most disposals attract 18% or 24% depending on income.

Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) sits at 18% from April 2026, up from 14% in 2025-26 and the original 10%. The relief caps at GBP 1 million of qualifying gains. The annual exempt amount is GBP 3,000, down from GBP 12,300 in 2022-23.

Carried interest taxation is being brought into the income tax net from April 2026.

The big structural change is the abolition of the non-dom regime from April 2025. The old remittance basis is replaced by a four-year foreign income and gains (FIG) regime, which gives limited shelter for the first four years of UK residence. After that, worldwide income and gains are taxable.

For Australians considering the UK as a long-term low-tax destination: those days are over. The four-year FIG window is useful for short-to-medium-term moves. As a forever-low-tax jurisdiction, the UK is now a worse proposition than it was three years ago.

Thailand

Thailand doesn’t have a separate capital gains tax. Capital gains are treated as ordinary income, with progressive rates up to 35%.

The interesting bit is how Thailand taxes foreign-source income. Thailand operates on a remittance basis. Foreign-source income (including capital gains on offshore assets like your ASX shares, US shares, foreign property, foreign business interests) is only subject to Thai tax if you remit it to Thailand. Keep the proceeds offshore and Thailand doesn’t tax the gain at all.

This is a major planning lever for Australians with offshore investment portfolios. A Thai tax resident can sell ASX shares, leave the proceeds in an Australian bank account or reinvest them in Australian or other foreign assets, and Thailand takes nothing. Same for gains on US shares, UK property, or any other non-Thai asset.

Tax residency triggers at 183 days in a calendar year. The rules tightened in 2024 to clarify that foreign income earned in a tax-resident year and later remitted is taxable when received (this closed the previous loophole of waiting a year before bringing the money in). But the 2024 change only matters if you remit. Money kept offshore stays outside the Thai net regardless.

Pre-residency money matters too. Funds you accumulated before becoming a Thai tax resident can be brought into Thailand without triggering tax, because the income wasn’t earned in a tax-resident year. For Australians planning ahead, this is worth structuring properly before the move.

Then there’s the Long-Term Resident (LTR) visa, which adds another layer. The LTR offers a flat 17% rate for highly-skilled professionals in qualifying industries. Three of the four LTR categories (Wealthy Global Citizens, Wealthy Pensioners, Work-from-Thailand Professionals) get a complete exemption from Thai tax on foreign-source income, including remitted foreign income. So if you qualify for the LTR, the remittance question stops mattering. You can bring the money in tax-free.

For Australians, Thailand offers two distinct paths to a genuinely attractive tax position. If you qualify for the LTR, foreign income can be remitted to Thailand tax-free under the qualifying categories. If you don’t qualify (or don’t want to commit to the LTR process), the standard remittance basis still gives you a 0% effective rate on offshore gains as long as you don’t remit them. For an Australian sitting on appreciated ASX shares or foreign investment portfolios who can fund Thai living costs from other sources, that’s a meaningful planning lever in its own right.

The cost-of-living point still applies. Thailand is materially cheaper than Sydney or Melbourne, particularly outside Bangkok. Healthcare quality in major cities is genuinely good and substantially cheaper than equivalent Australian private care. The expat community is large and English-language professional services are well established.

Malaysia

Malaysia doesn’t tax capital gains on most personal assets held by individuals. The exceptions are Real Property Gains Tax on Malaysian real property, and a 10% CGT on unlisted shares (companies, LLPs, and trusts only) introduced from January 2024.

Personal income tax tops out at 30% above MYR 2 million. No wealth tax. No inheritance tax.

The big news for Malaysia is the foreign-source income exemption for resident individuals. In December 2024 the government extended it by ten years, from 31 December 2026 out to 31 December 2036, via Gazette Order P.U. (A) 451/2024. The exemption applies to all classes of foreign-source income received in Malaysia by resident individuals (except income from a Malaysian partnership business), with conditions including a foreign tax-paid requirement.

The Malaysia My Second Home programme has been restructured in recent years. Current rules require significant liquid assets and a fixed deposit commitment, with tax treatment depending on residency status.

For Australians, Malaysia looks better now than it did 18 months ago. The 2036 extension takes a looming cliff off the table and makes Malaysia a viable destination on a multi-decade view, not just a short window. Worth getting the conditions right, but the structural setup is sound.

Philippines

The Philippines is one of those destinations that looks more complicated than it is. The key point: aliens (anyone who isn’t a Filipino citizen) are taxed only on Philippines-sourced income. Foreign-source income (your Australian dividends, your overseas rental income, your gains on assets held outside the Philippines) sits outside the Philippine tax net entirely.

The classifications matter for the rates. Resident-alien status for foreign nationals depends on the facts and length of stay; a longer, settled stay typically results in resident-alien treatment. Below that, you’re a non-resident alien, with a further split based on activity: more than 180 days in a calendar year and you’re engaged in trade or business (NRAETB), 180 days or less and you’re not (NRANETB). Resident aliens and NRAETBs are taxed at graduated rates (0 to 35%, with the first PHP 250,000 exempt and the top rate above PHP 8 million). NRANETBs are taxed at a flat 25% on gross Philippine-source income.

Capital gains tax on Philippine-located assets is asset-class specific, regardless of residency. Real property classified as a capital asset: 6% final tax on the higher of selling price or fair market value. Unlisted shares: 15% on the net gain. Listed shares: 0.6% stock transaction tax on the gross selling price. VAT is 12%.

For Australians, the Philippines is underrated. The combination of territorial-style taxation for aliens, English as an official language, a large existing expat community, lower cost of living than Singapore or Hong Kong, and direct flights to most Australian cities makes it a workable option for retirees with foreign pensions, remote workers on foreign payrolls, and high-net-worth individuals with offshore portfolios.

The trade-offs aren’t financial. Infrastructure, security, healthcare standards, and political stability are below the Singapore-Hong Kong tier. The professional services environment is less mature. None of that rules the Philippines out, but it shapes who finds it workable.

Vanuatu

Vanuatu is the only true zero-tax country within a 10-hour flight of Australia. No personal income tax. No capital gains tax. No inheritance tax. No wealth tax. No withholding tax. VAT is 15%. Real estate transactions attract fees and stamp duties totalling 7 to 12.5%.

Vanuatu has a citizenship-by-investment programme. Main applicant fees are around USD 130,000 plus due diligence. Tax residency is established through 183 days of presence, though the citizenship programme itself doesn’t require physical presence.

Now the honest bit. Vanuatu is a small Pacific nation with developing infrastructure. Banking access for OECD-resident persons is limited (most major Australian banks have closed correspondent relationships). Vanuatu has appeared on OECD tax cooperation watchlists. The legal protections, courts, and professional services aren’t in the same league as Singapore, Hong Kong, or even Malaysia.

Vanuatu works for some Australian retirees, certain entrepreneurs running remote businesses, and crypto investors who specifically value the regulatory environment. It’s not a generalist destination. If you’re considering Vanuatu, the tax position is genuinely zero. The practical realities are a separate question.

Vietnam

Vietnam taxes capital gains and asset disposals, but the rate depends heavily on the asset class and the taxpayer’s status. Listed securities (shares in joint stock companies) are typically taxed at 0.1% of the gross sale value for individuals. Capital interest transfers (typically in limited liability companies) can attract 20% on net gain for residents, while non-resident individuals on the same transfer pay 0.1% on transfer proceeds. Real property transfers are generally subject to 2% on the gross transfer value.

Vietnam has been considering reforms to the personal income tax treatment of securities and equity transfers, so a single headline rate doesn’t capture the picture. Personal income tax otherwise runs progressively up to 35%.

For Australians, Vietnam has become a destination for tech entrepreneurs and remote workers. But the tax compliance environment is materially more complex than the more established destinations. English-language professional services are improving but aren’t at the level of Singapore or Hong Kong.

Vietnam is usually a base for specific business activities (manufacturing, regional sales operations) rather than a generalist relocation choice. For most Australian individual investors, it’s not the first option in the region.

Indonesia

This is the section where I need to flag a common misconception. The famous 0.1% rate applies only to shares listed on the Indonesia Stock Exchange (IDX). It doesn’t apply to ASX shares, US shares, or any other foreign-listed shares. For Australians, that distinction matters enormously.

Indonesia taxes residents on worldwide income. So if you become an Indonesian tax resident (183 days triggers it), your ASX share gains, your overseas property gains, your foreign business income, all of it falls into the Indonesian net. There’s no remittance basis. There’s no foreign-income exemption for individuals.

Capital gains on foreign-listed shares and most other foreign assets are treated as ordinary income, subject to progressive personal income tax rates up to 35%. So an Australian who moves to Bali, becomes an Indonesian tax resident, and then sells their ASX portfolio is looking at progressive Indonesian tax up to 35% on the gain. The 0.1% final tax simply does not apply to foreign-listed shares.

The Australia-Indonesia DTA does provide some relief. Foreign tax paid (including Australian CGT paid before departure, where relevant) can typically be credited against Indonesian tax on the same gain. But the headline position is that Indonesia is a high-tax jurisdiction for foreign capital gains, not a low-tax one.

The other Indonesian tax rules, for completeness. Shares listed on the IDX: 0.1% final tax on gross sale value, plus 0.5% if shares were acquired through an IPO. Land and building transfers in Indonesia: 2.5% final tax on the higher of sale value or government-assessed value. Personal income tax progressive up to 35%. VAT 11%.

The Indonesian Golden Visa launched in 2024 and is still finding its feet. It offers extended residency for qualifying investors and high-net-worth individuals, but it doesn’t change the basic worldwide income principle for tax residents.

For most Australians, Indonesia is a lifestyle choice (Bali, mostly), not a tax choice. The combination of worldwide income taxation, progressive rates up to 35% on foreign capital gains, and a more complex compliance environment than the established financial centres means Indonesia rarely competes with Singapore, Hong Kong, Thailand or Malaysia on tax grounds for Australians with offshore portfolios. It works for some profiles (people whose income mostly comes from Indonesian sources, or whose lifestyle drivers outweigh the tax outcome), but the “low-tax tropical paradise” framing doesn’t survive a careful look at the rules.

European preferential regimes

Several European countries have set up specific regimes to attract high-net-worth individuals and skilled professionals. The relevant ones for Australians:

Italy. The lump-sum substitute tax regime lets new tax residents pay an annual flat tax that covers all foreign-source income for up to 15 years. The 2026 Budget Law (effective 1 January 2026) increased the lump sum from EUR 200,000 to EUR 300,000 for the main applicant, with the family member supplement doubling from EUR 25,000 to EUR 50,000. Anyone who transferred Italian tax residency before 1 January 2026 is grandfathered at their entry rate. For ultra-high-net-worth Australians with foreign income above EUR 1 million per year, even the higher EUR 300,000 rate beats paying Italian progressive rates on the full amount.

Portugal. The old Non-Habitual Resident regime closed to new applicants in late 2024 and was replaced by the IFICI regime (the catchy name is the Incentivised Tax Status for Scientific Research and Innovation). IFICI offers 20% on Portuguese-source employment income from qualifying activities and exemptions on most foreign-source income for 10 years. The qualifying activities are narrower than the previous NHR.

Cyprus. The non-dom regime exempts foreign-source dividends and interest from tax for 17 years for qualifying individuals. A 60-day residency rule means tax residency can be established with relatively limited physical presence (60 days plus other connections).

Greece. Offers a EUR 100,000 per year lump sum for high-net-worth individuals (similar to Italy but at a third of the rate, with stricter conditions) and a separate 7% flat tax on foreign pension income for qualifying retirees.

Malta. Various regimes including the Highly Qualified Persons rules (15% flat rate on employment income above EUR 86,938 for qualifying roles in financial services, gaming, and aviation) and the Global Residence Programme (15% flat rate on remitted foreign income with a minimum tax of EUR 15,000 per year).

For Australians, the European regimes are usually a longer-term play. Distance from Australia, cultural and lifestyle differences, and the specific qualifying conditions mean these destinations work for particular profiles (retirees, very high-net-worth investors, certain professionals) rather than the typical Asia-Pacific alternative.

What this actually does to the behaviour of Australian taxpayers

The headline comparison tells you Australia after 1 July 2027 sits at the top of the developed-world CGT range. The more interesting question is what that actually does.

Five things worth flagging.

Founder exits move offshore. When an Australian founder sells a business, the effective tax rate shapes whether the money gets reinvested in Australia or relocated. Under the current rules, a top-rate founder pays around 23.5% on the discounted gain. Under the new rules, the same founder pays 47% on the indexed gain. The maths is harder to ignore. For founders sitting on large unrealised gains, the question of whether to crystallise and reinvest locally, or relocate and exit offshore, is now genuinely different from what it used to be.

VC and PE funds reprice their carry. Funds typically structure carry as capital gains. Removing the discount changes the after-tax return for fund managers and, more importantly, the willingness of international capital to allocate to Australian funds. Carried interest is mobile. Funds can be established anywhere. Putting Australian funds at a 47% capital gains rate while Singapore-based funds operate at zero is exactly the kind of differential that moves capital.

The QSBS gap with the US gets worse. Section 1202 in the US lets a tech founder exclude up to USD 10 million of gain from federal tax entirely. Australia has no equivalent. After 1 July 2027, an Australian tech founder pays 47% on the indexed gain. A US founder of the same company, properly structured, pays 0%. If you’re building a company with international optionality, the maths is genuinely confronting.

Senior tech workers vote with their feet. The Employee Share Scheme regime in Australia has been a friction point for technology companies for years. The new CGT settings make it worse. Senior engineers and product leaders with significant equity in growth-stage companies have always had complex Australian tax outcomes on exit. From 1 July 2027, those outcomes are materially worse than the alternatives in San Francisco, Singapore, London, or Dubai.

Property investors do the maths. Combined with the negative gearing restrictions, the CGT changes shift the after-tax economics of Australian residential property investment in a real way. For high-income property investors specifically, the post-2027 settings are materially less attractive than what they replaced.

What this does to the country over the long run

Here’s the honest part. The case for the policy changes is that they raise revenue and they make the tax system less skewed toward the wealthy. Both points are defensible. As a revenue measure, the changes will generate billions for the Commonwealth.

The case against the policy changes is that they assume the things being taxed will keep happening in Australia. Capital is mobile. Founders are mobile. High-income earners are mobile. A tax rate that raises X dollars on activity in Australia raises zero on activity that’s quietly relocated to Singapore.

Four things to think about over a longer horizon.

Mobile capital flows toward lower-tax jurisdictions. This isn’t a moral claim. It’s empirical. Other things equal, investment goes where it’s treated best. Australia post-2027 sits well above the Asia-Pacific competitor rates. International investors factor this into allocation decisions.

Brain drain compounds. Founders and skilled workers who leave often don’t come back. Their networks build offshore. Their next ventures incorporate there. The cost to Australia isn’t just the immediate revenue. It’s the next generation of business formation and ongoing investment that doesn’t happen here.

Signalling matters. Australia’s reputation as a predictable place to invest is shaped by policy consistency. Adding a minimum tax on top of removing a long-standing discount sends a particular signal. International investors notice these signals.

Revenue assumptions are often wrong. Treasury modelling typically assumes static behaviour, meaning taxpayers don’t change what they do in response to tax changes. The actual revenue depends on dynamic response. If 10% of high-net-worth Australians relocate before 2027, or if 20% of founder exits happen offshore, the revenue projections are off by serious money.

None of this is a prediction. It’s an observation. The policy has tradeoffs, and the tradeoffs deserve honest analysis.

If you’re thinking about leaving, here’s what you actually need to know

The departure planning is itself a complex tax event. Worth a section because most people get this part wrong.

The central issue is CGT Event I1 in section 104-160 of the Income Tax Assessment Act 1997. When you cease being an Australian tax resident, you’re deemed to have disposed of all your CGT assets (with some exceptions for taxable Australian property) at their market value on the day you leave. The deemed gain is taxed in the year of departure, unless you make a section 104-165 choice to defer the gain.

The deferral choice sounds attractive. It often isn’t. Deferring the I1 event means the assets stay in the Australian CGT net. So when you eventually do sell, you pay Australian CGT on the whole gain, including the bit that accrued while you were a foreign resident. For many people leaving Australia, taking the I1 hit in the year of departure and resetting the cost base is genuinely the cheaper option. For some, it isn’t. The answer depends on your specific facts, and the wrong choice can cost serious money.

There are also rules about the market value cost base when an asset becomes taxable Australian property (section 855-45) and the foreign resident capital gains withholding regime (which increased to 15% from 1 January 2025, with the previous AUD 750,000 threshold removed). These affect long-term planning for property assets retained after departure.

One thing for clarity, because it comes up a lot. Leaving Australia for tax purposes doesn’t mean giving up Australian citizenship. Most Australians who relocate stay Australian citizens. What changes is tax residency, which is a separate question, determined under the residency tests in section 6 of the Income Tax Assessment Act 1936 and the ATO’s published guidance.

Tax residency questions on departure are genuinely complex. When you relocate overseas, it’s the things you don’t know that you don’t know that make all the difference financially between a roaring success and simply a change of scenery, same outcome, different country. This is the bit where specialist advice actually earns its keep.

None of this is an argument against Australia

Worth saying directly. None of the above is an argument that Australia is a bad country, or that everyone should leave. Australia has plenty most countries on this list don’t: beaches, political stability, a healthcare system that works, an education system that doesn’t bankrupt you, and a quality of life that consistently ranks in the global top ten.

The question this article asks is narrower. What happens to your after-tax outcomes if you’re an active investor, founder, or high-income earner, and what do your options actually look like?

For most Australians, the answer will be: Australia is still the right place to live. The tax differential doesn’t outweigh family, community, lifestyle, the kids’ schools, your mum being a 30-minute drive away. None of that is a line item in a spreadsheet.

But for a meaningful minority, the spreadsheet matters. Founders contemplating an exit. High-net-worth investors with mobile capital. Senior executives with international career optionality. For these people, the policy changes coming on 1 July 2027 are large enough to move the question of relocation from theoretical to practical.

We saw a noticeable uptick in outbound consultations after COVID, as Australians reassessed where they wanted to live and work in a more globally mobile world. We expect a similar uptick after these CGT changes, for similar reasons but with different drivers. Some of the people booking will conclude staying is right. Some will conclude going is right. Both are legitimate answers. The work is in getting the right answer for your specific situation.

The bottom line

Australia’s post-Budget CGT regime puts the country in an unusual position. For high-income earners, the 47% effective rate on the indexed gain sits at or above almost every comparable jurisdiction within practical reach of Australian relocation.

That’s not a moral judgment on the policy. It’s an observation about competitive positioning. Capital moves. Talent moves. Tax rates change behaviour at the margin, and at the margin, Australia just got materially less competitive for the people who own and build things.

For most Australians, the move doesn’t make sense. For some, it now does. The difference between those two outcomes is the kind of analysis that depends on facts, numbers, and specialist understanding of both the Australian departure rules and the destination tax regime.

Get that analysis right and the move can transform your financial outcome over the next twenty years. Get it wrong and you can spend a fortune in tax, lose access to Australian residence, and end up worse off than if you’d just stayed put.

The maths is doable. But it’s not the kind of maths you want your good mate who knows a thing or two aout tax do on the back of an envelope.

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Shane Macfarlane CA

CEO & Founder at Expat Taxes

Shane's an Australian Chartered Accountant and Australian expat tax specialist who's also an expat himself (based in Asia). Shane's passionate about tax and legitimate tax minimisation, tax-planning and structuring, particularly as it relates to Australian expats who are often subject to high rates of tax back home in Australia.

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Latest posts by Shane Macfarlane CA (see all)

• Australian CGT Changes 2027: How Australia Compares Globally - 01/06/2026
• Accessing Australian Super From Overseas: 2026 Tax Guide - 29/05/2026
• Working Holiday Maker Tax Australia 2026: Complete Guide - 27/05/2026