Anthony Albanese has confirmed a major tax overhaul that will hit Australians who make money from selling shares and other investments.

The changes, unveiled in Tuesday night's federal budget, will scrap the long-standing 50 per cent capital gains tax discount and replace it with a new inflation-linked system from July 1, 2027.

Since 1999, Australians who sold assets such as shares, farms, investment properties or small businesses after holding them for more than 12 months only had to pay tax on half the profit.

That meant someone on the top marginal tax rate of 47 per cent effectively paid a maximum capital gains tax rate of 23.5 per cent.

But under Labor's new system, investors will instead pay tax on their 'real' profit after inflation is taken into account, while also facing a minimum 30 per cent tax rate on those gains.

Instead of automatically halving the profit, the original purchase price of an asset will be increased in line with inflation before tax is calculated.

For example, if an investor bought shares for $100,000 and inflation lifted the equivalent value of that investment to $130,000, before the shares were later sold for $200,000, the taxable gain would fall from $100,000 to $70,000.

That means tax would only apply to the $70,000 'real' profit rather than the full nominal gain.

Treasury's examples show someone earning a typical 5 per cent annual return on a $500,000 asset over 10 years would pay about $8,075 more tax under the new system compared to the current 50 per cent discount. 

But investors earning very strong returns would be hit much harder. Treasury said someone earning a 7.5 per cent annual return on the same investment over 10 years would pay an extra $58,851 in tax. 

By contrast, investors whose returns barely outpace inflation could end up paying less tax than they do now because the inflation adjustment wipes out much of the taxable gain. 

Treasury's example showed one investor paying nearly $25,000 less tax under the new rules because their investment only matched inflation. 

The government said the minimum 30 per cent tax rate on capital gains will stop investors from paying very low rates by selling assets in years where their taxable income is low. 

'We're replacing the 50 per cent capital gains tax discount with inflation-adjusted indexation from 1 July 2027 to restore the taxation of real gains, with a minimum tax rate of 30 per cent on realised gains,' the government said.

'The introduction of the minimum tax reduces the benefit of taxpayers deferring capital gains realisation to years where their marginal tax rates are low.'