Capital gains tax unlocked: What is it? Why do we pay it? How will the changes affect you?

Capital gains tax has become a hot topic in property amid the introduction of significant reforms to property investment taxation announced in the 2026 Federal Budget.What is it? CGT is a tax paid on the profits made when disposing of assets. In Australia, that includes anything from investment properties and cars to shares, cryptocurrency, land, managed investments and even collectibles like art and jewelry.Having made profit is generally looked on as an increase in an individual's ability to pay tax, meaning a slice of the pie is taken to be put towards public services seem to benefit the environment that allowed the profit to accumulate.From 1 July next year, a new regime will be applied to all assets, residential property included.Treasurer Jim Chalmers confirmed the change is meant to “help rebalance a system where house prices have decoupled from incomes", while better leveling the playing field between investors and first-home buyers.Investors will be taxed on the 'above-inflation' gain on their asset, rather than on half of the total gain as per the old system.Treasurer Jim Chalmers says the government wants to level the playing field between investors and first-home buyers...