The Fine Print Australia · PUBLISHED 25 JUN 2026 · VERIFIED 25 JUN 2026 · AU EDITION

$9,000 Tax Hit: Capital Loss Harvesting Before June 30

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If you realised a $20,000 capital gain on shares in 2025–26 and miss the chance to realise $20,000 of losses before 30 June 2026, you could pay up to $9,000 more tax than necessary (at the top 45% marginal rate), purely because you didn’t lock those losses in time.

The number that matters

$5,000 — that’s the extra tax a typical higher‑income investor (37% marginal rate) pays in 2025–26 if they realise a $20,000 capital gain on shares but don’t realise $20,000 of available capital losses before 30 June to offset it, given that net capital gains are taxed at the investor’s marginal rate and must be reduced by current‑year capital losses first.

How it quietly costs you

Mechanism — how capital loss timing quietly costs money

• Capital gains on investments (shares, managed funds, investment property) are added to your assessable income and taxed at your marginal tax rate.
• Current‑year capital losses must be applied against current‑year capital gains to work out your net capital gain or net capital loss.
• The ATO states that if you have current‑year capital losses that can be applied to 2025–26, “they must be applied here. You can’t choose to defer to a later year any amount that can be applied this year.”
• Any unused capital losses become a net capital loss that can be carried forward indefinitely to offset future capital gains, but they cannot be used to reduce other income like wages.
• Practically, this means:
• If you realise gains in 2025–26 but wait until after 30 June 2026 to sell loss‑making investments, those losses will only offset gains in 2026–27 or later — they cannot reduce your 2025–26 tax bill.
• The “tax‑loss harvesting window” for the 2025–26 year closes at 30 June 2026 — after that, any realised losses are in the next financial year.

Quantified impact (2025–26 year)

Assume:

• Investor has realised $20,000 of capital gains on shares in 2025–26.
• They also hold shares sitting at an unrealised loss of $20,000 they’re comfortable selling.
• Marginal tax rate:
• Scenario A: 37% (taxable income between $135,001 and $190,000 under current schedules — typical higher‑income but below the top bracket).
• Scenario B: 45% (top bracket).

1. Old (bad) behaviour — wait until after 30 June 2026 to sell losers

• 2025–26 net capital gain: $20,000 (no current‑year losses applied).
• Tax on gain at 37%: $7,400 in capital gains tax for 2025–26.
• Tax on gain at 45%: $9,000 in capital gains tax for 2025–26.

2. Better behaviour — realise the $20,000 loss before 30 June 2026

• 2025–26 capital gains: $20,000.
• 2025–26 capital losses: $20,000 realised before 30 June 2026.
• Net capital gain: $0 — no CGT on this portion for 2025–26.
• CGT saving vs doing nothing:
• $7,400 at a 37% marginal rate.
• $9,000 at a 45% marginal rate.

The ATO rules make clear that current‑year losses must be used now and cannot be deferred, so missing the 30 June deadline simply means paying full CGT on 2025–26 gains and only getting relief in later years.

The second, compounding trap

Mechanism — new 2027 capital gains reforms raise the long‑run cost of inaction

• From 1 July 2027, the Federal Budget 2026–27 will:
• Replace the 50% CGT discount for individuals, trusts and partnerships with cost base indexation and
• Introduce a minimum 30% tax rate on capital gains.
• These changes apply to capital gains that accrue from 1 July 2027 when they are realised.
• Assets owned prior to 1 July 2027 and sold after that date are split:
• Gains made prior to 1 July 2027 are taxed under current rules (including the 50% discount).
• Gains made after 1 July 2027 are taxed under the new 30% minimum system.
• The Budget papers and Treasury explain that the 50% discount will apply to the difference between the asset’s cost base and its value at 1 July 2027, with gains after that taxed under the new rules.
• Practically, for investors with large unrealised gains and losses:
• Using losses in 2025–26 and 2026–27 to reduce gains under the old, more generous discount system can be significantly more valuable than letting gains “roll” into the higher‑tax regime from 1 July 2027.
• Future gains will have a minimum effective tax of 30%, versus potentially much lower effective rates today when the 50% discount applies (e.g. 37% marginal × 50% discount ≈ 18.5% effective CGT).

Quantified long‑run cost

Assume:

• Investor sits on:
• Current realised gain in 2025–26: $20,000 on shares.
• A larger investment property they plan to sell after 1 July 2027 with an expected capital gain of $200,000.
• Marginal rate: 37%.

1. If they do nothing in 2025–26 (don’t harvest losses now)

• 2025–26 tax on $20,000 gain: $7,400 (37%).
• 2027+ property gain: $200,000.
• Under new rules (no 50% discount, minimum 30% CGT): tax at 30% = $60,000 on that property gain.
• Total CGT across the two events: $67,400.

2. If they realise $20,000 of capital losses before 30 June 2026 and also sell the property before 1 July 2027

• 2025–26:
• Gains $20,000 minus losses $20,000 = net gain $0 → $0 CGT.
• Property sold before 1 July 2027 with $200,000 gain:
• Under current rules, if held >12 months: 50% discount, so only $100,000 is taxable.
• Tax at 37% on $100,000: $37,000 CGT.
• Total CGT: $37,000.

Cost of inaction in this combined scenario:

• Doing nothing: $67,400 total CGT.
• Acting before 30 June 2026 and before 1 July 2027: $37,000 total CGT.
• Difference: $30,400 extra tax over the next few years, mostly because:
• They failed to use 2025–26 losses when their gains were taxed under the discount regime, and
• They allowed a large property gain to fall into the minimum 30% CGT regime instead of the discounted regime.

What this looks like in practice

Persona

• Name: Sarah
• Age: 43
• Job: Senior marketing manager in Sydney.
• Income: $160,000 taxable income in 2025–26 (37% marginal tax bracket).
• Investments:
• Share portfolio worth $150,000, with a realised gain of $20,000 in 2025–26 and an unrealised loss of $15,000 on a tech ETF.
• Investment apartment purchased in 2014, current market value implies an unrealised gain of about $250,000 if sold in the next few years.
• Years to retirement: aiming for age 65 → 22 years.
• Account types: personal share investments via CHESS‑sponsored broker; investment property held directly; superannuation in an industry fund (not central to this scenario).

Discovery 1 — current‑year loss rules

• Sarah reads the ATO’s capital gains instructions and learns that current‑year capital losses must be applied against capital gains in that year, and cannot be deferred if they can be used now.
• She models two options for 2025–26:
• No loss harvesting: pay $7,400 CGT on her $20,000 share gain (37%).
• Realise her $15,000 ETF loss before 30 June 2026:
• Net gain = $20,000 – $15,000 = $5,000.
• CGT = 37% of $5,000 = $1,850.
• Saving discovered: she can cut her immediate CGT bill by $5,550 simply by selling the ETF before 30 June 2026 instead of after.

Discovery 2 — carry‑forward loss power

• The ATO explains that if total capital losses in a year exceed gains, the net capital loss is carried forward with no time limit, to reduce future capital gains only.
• Sarah realises that if she harvests a $30,000 loss this year (more than her $20,000 gain):
• 2025–26:
• Gains $20,000 – losses $30,000 = net capital loss of $10,000.
• $0 CGT this year.
• The $10,000 net capital loss is recorded at label V in her supplementary tax return and carried forward.
• If, say, she sells some shares in 2027–28 for a $25,000 gain:
• That $25,000 future gain can be reduced by the $10,000 carried‑forward loss, leaving $15,000 taxable.
• In her planning spreadsheet, she sees that this one‑year harvesting decision could save:
• $3,700 in CGT on that later sale (37% of the $10,000 reduction).

Discovery 3 — upcoming 30% minimum CGT regime

• Treasury’s Budget 2026–27 papers explain that from 1 July 2027, individuals will face:
• Replacement of the 50% discount with inflation‑based indexation, and
• A minimum 30% tax rate on capital gains.
• Sarah compares:
• If she sells her investment apartment before 1 July 2027 with a $250,000 gain:
• 50% discount: $125,000 taxable.
• CGT at 37%: $46,250.
• If she waits and most of the gain accrues and is realised after 1 July 2027 under the new rules:
• No 50% discount, minimum 30% → tax ≈ $75,000 on the full $250,000 gain.
• Difference discovered: delaying the sale could cost her around $28,750 more in CGT on that one property, on top of any extra tax she pays on unharvested share gains.

The full cost of doing nothing

Headline number

For Sarah, combining the impact of failing to realise capital losses before 30 June 2026 with the upcoming 30% minimum CGT regime, the plausible lifetime cost of inaction is on the order of $40,000–$50,000 in extra tax across her share portfolio and one major property sale.

Modelling basis (assumptions)

1. Shares (2025–26)

• Realised gain: $20,000.
• Unrealised loss available: $15,000.
• Marginal rate: 37%.
• If she does nothing:
• CGT on $20,000 = $7,400.
• If she harvests the $15,000 loss pre‑30 June 2026:
• Net gain $5,000 → CGT $1,850.
• Immediate saving: $5,550.

2. Future shares (carry‑forward loss)

• If she realises an extra $15,000 of losses (total $30,000), creating a $10,000 net capital loss to carry forward:
• Later gain in 2027–28: $25,000.
• Loss offsets $10,000 of that gain:
• CGT saving: 37% × $10,000 = $3,700.

3. Property sale around 2027

• Apartment gain: $250,000.
• Sale before 1 July 2027:
• 50% discount → $125,000 taxable.
• CGT at 37% = $46,250.
• Sale after 1 July 2027 under new rules:
• Minimum 30% CGT on full $250,000 = $75,000.
• Difference: $28,750.

Adding these components:

• $5,550 (2025–26 share loss harvesting)
• $3,700 (future use of carry‑forward loss)
• $28,750 (property timing vs 30% minimum CGT)

Total realistic combined tax cost of inaction for Sarah: $37,​,​,, (≈$38,000), and that excludes smaller portfolio decisions over the next two decades where earlier, discounted gains could be swapped for later, higher‑taxed gains.

What to do about it

Move 1 — Audit and harvest capital losses before 30 June

1. Action: Review your investment portfolio and realise appropriate capital losses before 30 June.
2. Tool/portal:

• Use your broker or share registry portal plus your own transaction records to identify:
• Purchase prices (cost base)
• Current market values
• Unrealised gains/losses.
• Cross‑check with the ATO’s “Capital gains 2026” instructions to understand how losses are applied in your return.

3. Steps:

• List every asset you sold in 2025–26 and all current holdings with unrealised losses (spreadsheet or broker export).
• For each loss‑making holding, calculate the unrealised loss (current price minus cost base) and decide whether you’re comfortable selling purely for tax reasons.
• Before 30 June 2026, place sell orders for the selected loss‑making assets so the trades settle in the 2025–26 financial year, then retain all records for your tax agent and for label 18 – V if a net capital loss results.

4. Benchmark (“good” looks like):

• Your net capital gain for 2025–26 is materially lower (or zero) because all commercially sensible losses have been realised and applied against gains, minimising CGT at your marginal rate.

Move 2 — Record and use carry‑forward capital losses

1. Action: Confirm your net capital losses and ensure they’re correctly carried forward for future years.
2. Tool/portal:

• myGov → ATO online services → Income tax → Lodgments → History to view prior returns and capital gains schedules.
• Use the ATO’s individual supplementary tax return instructions for question 18 (Capital gains) to see how to record net capital losses at label V.

3. Steps:

• Check your 2024–25 and 2025–26 tax returns for any amount at question 18, label V (net capital losses carried forward).
• If you realise more losses than gains in 2025–26, ensure your agent or software correctly reports the net capital loss and that you retain supporting documentation.
• Before selling investments in future years, look up your carried‑forward loss balance and factor it into your sale timing and tax estimates.

4. Benchmark:

• You have a clearly documented carried‑forward loss figure and, when you realise capital gains in later years, those losses are fully applied before any CGT is paid, exactly as the ATO requires.

Move 3 — Plan around the 1 July 2027

Sources

• https://www.ato.gov.au/forms-and-instructions/individual-supplementary-tax-return-2026-instructions/income-questions-13-24-supplementary-tax-return-2026/18-capital-gains-2026
• https://treasury.gov.au/policy-topics/taxation/budget2026-27
• https://budget.gov.au/content/factsheets/download/tax-explainers-negative-gearing-capital-gains-tax.pdf

Researched 2026-06-25.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.