2 September 2026
An overhaul of capital gains taxes in Australia will change the way long-term shareholders think about accessing liquidity.
The clock is ticking for Australian investors, with a new capital gains tax regime set to take effect from 1 July next year.
Under the new rules, Australian taxpayers will lose their 50% discount on capital gains from asset disposals, including share sales. Instead, the entire gain – after inflation – will be taxable at a minimum rate of 30%.
Long-term shareholders are studying the implications closely. The new rules apply only to capital gains that accrue from July 2027, so most shareholders will have nothing to gain from selling ahead of the deadline. However, investors who are considering a sale in the future may need to review their options.
While the new rules will hurt future share sales, investors in need of liquidity can consider equity-backed loans instead.
Selling shares just got more expensive
Thanks to grandfathering provisions, long-term shareholders need not rush for the exits before next July. But as the new rules come into force, investors will find selling increasingly expensive.
Under the current system, a A$1 million parcel of shares bought three years earlier for A$200,000 produces an A$800,000 gain. After the 50% discount, only A$400,000 is taxable — leading to a A$188,000 tax bill at the top marginal rate.
Under the new regime, the same transaction could generate a tax liability of up to A$367,000 — assuming inflation at 3% a year. In other words, every sale becomes significantly more punitive, and liquidity now comes with a much higher price tag.
Borrowing against those shares, however, may be a more compelling option.
If that same investor borrows against their equity position (usually at favourable rates), they can often access the liquidity they need — to fund a business, buy a property, reinvest elsewhere, or simply manage cash flow — without triggering a taxable event.
The interest on that borrowing may also be tax-deductible, while investors retain upside exposure to their portfolio. In effect, investors can unlock capital while staying committed to their investment thesis.
Astute investors around the world regularly borrow against their assets to unlock capital. Business owners, directors and individuals who remain convinced in the prospects of the stocks they own are often reluctant to sell – especially if the market conditions are not ideal.
While still maintaining a relatively low profile in Australia, equity financing has gained widespread acceptance globally. The market for share-based lending or Lombard lending was valued at US$4.3 trillion in 2024 and has grown significantly over the last two years.[1] Apart from leading banks, the service is offered by a growing array of financial institutions, including alternative credit providers like EquitiesFirst.
A new landscape for long-term investments
Australia’s new tax rules will impact all long-term investments, and could make shares more attractive relative to property (See our previous article “Will shares trump property after Australia’s tax changes?” here).
Investors, however, will need to pay attention to the economic outlook when deciding whether to monetize their share holdings.
The combination of rising cost pressures, persistent inflation, and elevated interest rates has created a strain on households and businesses across Australia.[2]
At the same time, rising rates and surging demand for iron ore, copper and aluminium have pushed up stock prices for the Australian banks and miners that currently dominate the local bourse.[3] Borrowing against those shares at their current valuations may allow long-term shareholders to unlock significant sums.
Despite the challenging backdrop, the outlook for Australian equities is broadly positive although leadership may broaden beyond the top names, with quality names trading below valuations despite strong earnings performance.[4] Meanwhile, AI-driven infrastructure demand and adoption is also expected to make a difference for companies across a swathe of industries in the coming months.
For long-term shareholders and business owners, Australia’s new tax regime also adds a layer of complexity. Tracking the original purchase price of shares bought over decades, many bought as part of dividend reinvestment plans (while corporate actions like share dilution further muddle the picture), creates an administrative burden many prefer to do without.
For asset owners with liquidity needs, the growth of alternative capital solutions can provide additional options. Equity financing can allow investors to unlock capital from long-term equity holdings without crystallising a taxable gain. With EquitiesFirst’s non-recourse financing model, any funds raised are flexible, and can be used to meet unforeseen expenses, fund growth plans, or new investments.
As long-term investors grapple with new tax rules, many will be wondering if (or when) they should sell their shares. Equity-backed financing can be an alternative solution.
[1] https://www.deloitte.com/ch/en/Industries/financial-services/blogs/unlocking-value.html
[2] https://www.afr.com/policy/economy/inflation-a-bigger-worry-than-housing-for-australians-20260722-p60hdm
[3] https://www.afr.com/markets/equity-markets/from-property-to-merch-slingers-punters-tip-the-best-value-asx-stocks-20260714-p60f35
[4] https://www.morningstar.com.au/markets/what-market-may-be-missing-fy27
All statements in this article are for general purposes only, and do not constitute and may not be interpreted or construed as legal opinion or professional advice; the advice of legal counsel should be obtained regarding all regulatory matters discussed herein.
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