Two owners selling an investment property: how is CGT split?

As at 30 October 2026. By Plain Numbers Co team.

When two people own an investment property, each owner makes their own capital gain or loss, in line with their legal ownership interest: equal shares for joint tenants, and the shares on the title for tenants in common. Each owner reports their share in their own tax return and pays tax at their own rates, so the same sale can cost one owner far more tax than the other. If you sell on or after 1 July 2027, each owner's share is also split at 1 July 2027 under the new CGT rules, and you can test your own numbers, with two owners, in our free 2027 CGT Change Checker.

Key takeaways

• The gain is split by legal ownership on the title, not by who paid more or by what suits your tax rates.
• Each owner adds their share to their own taxable income, so the owner on the higher income pays more tax on the same share.
• From 1 July 2027, each owner's share keeps the 50% discount on growth to 1 July 2027 and is indexed after that, with the 30% minimum tax checked owner by owner.

At a glance (point | details)

• Who makes the gain | Each co-owner, in line with their ownership interest
• Joint tenants | Equal shares (two owners = 50% each)
• Tenants in common | The shares on the title (for example 70/30)
• Whose return | Each owner reports their own share
• Tax rate | Each owner's own marginal rate, on top of their other income
• Sales from 1 July 2027 | Each share split at 1 July 2027: discount before, indexation after
• 30% minimum tax | Applies to individuals, so it's checked for each owner
• Law status | Treasury Laws Amendment (Tax Reform No. 1) Act 2026 is law; Tranche 2 pending

Contents

• How the gain is split between owners
• What changes for sales from 1 July 2027
• Worked example: two owners selling in November 2029
• Why the split makes such a difference
• What this means for you
• FAQ
• Sources

How the gain is split between owners

The ATO says that if you're a co-owner, "you'll make a capital gain or loss in accordance with your ownership interest in the property". How that works depends on how you hold the title:

• Joint tenants have equal shares, so each of two owners has half of the gain or loss.
• Tenants in common hold defined shares, which can be unequal. The gain is split according to those shares.

In the ATO's own example, a couple who hold a rental 10% and 90% as tenants in common report 10% and 90% of the gain. The split follows the legal ownership interest, so you can't move more of the gain to the owner on the lower income just because it would save tax.

Each owner then works out their own result: their share of the sale proceeds, less their share of the cost base (purchase price, stamp duty, legal fees, capital improvements and selling costs), less any CGT discount they're entitled to. That figure goes into their own return.

What changes for sales from 1 July 2027

The ATO says the first stage of the reform, the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, is now law. From 1 July 2027, cost base indexation replaces the 50% discount for gains that accrue on or after that date, and individuals pay a minimum 30% tax on those gains. A second tranche of legislation (Tranche 2, including the apportionment method) is still pending.

For a property bought before 1 July 2027 and sold after it, each owner's share is treated in two parts:

1. Before part: the 1 July 2027 value less the cost base. The 50% discount still applies if the owner has held the property for at least 12 months.
2. After part: the sale proceeds less the 1 July 2027 value indexed for inflation. No discount, and never taxed below 30% for that owner, unless they receive a means-tested income support payment in the year of the sale.

You'll need the property's market value immediately before 1 July 2027, or the apportionment method the Government is still developing. One valuation of the whole property is the practical starting point, and each owner then takes their share of it.

Worked example: two owners selling in November 2029

Mia and Tom own an established rental property as joint tenants (50% each). Mia has $150,000 of other taxable income in the year of sale and Tom has $30,000. Neither receives an income support payment. We assume inflation of 2.5% a year and the 2027-28 resident tax rates (14% second bracket) continue, with the Medicare levy and the low income tax offset included.

• Bought 10 March 2016 for $600,000, plus $25,000 stamp duty and legal costs: cost base $625,000
• Market valuation at 1 July 2027: $950,000
• Sold 15 November 2029 for $1,100,000, less $27,500 selling costs: net proceeds $1,072,500

Step 1 – Before part (whole property). $950,000 − $625,000 = $325,000.

Step 2 – After part (whole property). 1 July 2027 to 15 November 2029 is 868 days. Inflation factor = 1.025^(868 ÷ 365.25) = 1.060437. Indexed value = $950,000 × 1.060437 = $1,007,415. Real gain = $1,072,500 − $1,007,415 = $65,085.

Step 3 – Split 50/50. Each owner has a before part of $162,500 and an after part of $32,543.

Step 4 – Each owner's taxable gain. Before part with the 50% discount, $81,250, plus the after part in full, $32,543 = $113,793 each.

Step 5 – Tax on that gain, on top of each owner's other income.

• Mia ($150,000 → $263,793): income tax rises from $36,302 to $84,309 and Medicare from $3,000 to $5,276, so $50,282 extra tax.
• Tom ($30,000 → $143,793): income tax after offsets rises from $952 to $34,005 (he also loses his $700 low income tax offset) and Medicare from $199 to $2,876, so $35,730 extra tax.

Step 6 – 30% minimum check. Taken as the top slice of income, Mia's after part is taxed at 45% and Tom's at about 31.9% (30% up to $135,000, then 37%). Both are above 30%, so neither owner has a top-up.

Step 7 – Compare with the old rules. Whole gain $1,072,500 − $625,000 = $447,500, so each owner has $223,750, or $111,875 after the 50% discount. Tax: Mia $49,381, Tom $34,982.

Result: together they pay $86,013 under the new rules against $84,364 under the old rules, about $1,649 more. Mia pays $901 more and Tom $748 more. These figures match our free 2027 CGT Change Checker v1.3 to the dollar.

Why the split makes such a difference

The same sale, with the same assumptions, gives a different total tax bill depending on who is on the title:

• 50/50 (joint tenants): $86,013
• 70/30 (Mia 70%, Tom 30%, tenants in common): $92,225
• Mia as the only owner: $103,765

The total gain doesn't change. What changes is how much of it lands on the higher-income owner. This is why the ownership structure is worth thinking about when you buy, because you can't re-split the gain when you sell.

What this means for you

• Check your title: joint tenants split equally; tenants in common split by the shares shown.
• Each owner should keep their own records of their share of the costs, and plan for the tax in their own year of sale (including a low-income year, where the 30% minimum could matter).
• If you'll sell after 1 July 2027, arrange one valuation of the property close to 30 June 2027.
• Run both owners' numbers, with your own dates, prices and incomes, in the free 2027 CGT Change Checker (tick "two owners").
• Planning sales across several properties owned by one or two people, with any ownership split? The Australian Property Portfolio Planner shows each owner's tax every year to 2036-37.

Related reading: Selling an investment property after 1 July 2027: CGT explained and, if a co-owner has died, Executor checklist Australia: the first 30 days.

FAQ

Do joint owners pay CGT separately?

Yes. Each co-owner makes their own capital gain or loss and reports their share in their own tax return.

Can we split the gain 90/10 to the lower-income owner?

Not by choice. The ATO splits the gain in line with each owner's legal ownership interest, so it follows the title.

Does each owner get the 50% CGT discount?

For a sale before 1 July 2027, an individual who has owned the property for at least 12 months can apply the discount to their share. From 1 July 2027 the discount only applies to growth up to 1 July 2027.

Does the 30% minimum tax apply to each owner?

It's a minimum tax for individuals, so it's worked out for each owner on their own share of the after-1 July 2027 gain. Owners who receive a means-tested income support payment in the year of sale are exempt.

Do we need two valuations at 1 July 2027?

No. A valuation of the whole property gives the 1 July 2027 value, and each owner uses their share of it.

General information only, not tax, legal or financial advice. Check your own situation with a registered tax agent.

Sources

• ATO, Capital gains tax when selling your rental property (last updated 22 June 2026)
• ATO, Acquiring CGT assets – joint tenants and tenants in common (last updated 22 June 2026)
• ATO, Capital gains tax reform (published 13 October 2026)
• ATO, Tax reform – boosting home ownership, reforming negative gearing and capital gains tax (last updated 29 June 2026)
• ATO, Personal income tax – new tax cuts for every Australian taxpayer – 14% from 1 July 2027
• Federal Register of Legislation, Treasury Laws Amendment (Tax Reform No. 1) Act 2026, Act No. 49 of 2026
• Treasury, Capital Gains Tax and Negative Gearing – Tranche 2 legislation consultation