Australia’s New CGT Rules: What Crypto Holders Need To Know Before 1 July 2027
Episode by Peter Bui on June 30th, 2026
Australia’s capital gains tax rules are set for a major change from 1 July 2027, and the shift could matter for anyone holding crypto, shares, property or other investment assets. For Australian crypto holders, the headline issue is simple: the familiar 50% CGT discount for assets held longer than 12 months is being replaced by a different system built around indexation and a 30% minimum tax floor.
In this episode, Peter breaks down what is changing, why the government is moving in this direction, and what planning conversations crypto investors may want to have before the deadline. This is not financial or tax advice, but it is the kind of change that deserves proper attention well before tax time.
What Is Changing From 1 July 2027?
The current Australian CGT treatment is relatively easy to explain. If an individual buys an investment asset, holds it for more than 12 months, and later sells it for a gain, they may be eligible to reduce the taxable capital gain by 50%. That treatment has been part of Australia’s tax system since the Howard-era changes that followed the Ralph Review in 1999.
The new approach discussed in this episode replaces that 50% discount with cost base indexation, alongside a 30% minimum tax rate on real capital gains. Baker McKenzie’s Federal Budget 2026-27 analysis and William Buck’s capital gains tax summary both describe the change as a broad reform affecting capital gains assets, including property, shares and other investment assets.
For crypto holders, the practical question is how this affects assets such as ADA, Bitcoin or other tokens that may have been held for years. Crypto is already treated under the standard CGT framework by the ATO, meaning that selling, swapping, gifting, converting to fiat, or using crypto to buy goods and services can all trigger CGT events.
How Indexation Changes The Calculation
Under the existing 50% discount model, the calculation can be straightforward. If a crypto holder buys an asset for $3,000, later sells it for $6,000, and has held it for more than 12 months, the capital gain is $3,000. The discount can reduce the taxable gain to $1,500, with tax then calculated at the holder’s marginal rate.
Indexation works differently. Instead of cutting the gain in half, the cost base is adjusted for inflation. In Peter’s example, if a $3,000 cost base were indexed upward by 20%, the indexed cost base would become $3,600. The taxable gain is then calculated against that adjusted cost base.
That may sound helpful, especially during periods of higher inflation, but the 30% minimum tax floor changes the outcome. If a taxpayer’s marginal rate is below 30%, the floor may increase the effective tax rate on the real gain. If their marginal rate is already above 30%, the floor may not change their rate, but the loss of the 50% discount may still be significant.
Who Could Be Hit Hardest?
The impact depends heavily on two factors: inflation during the holding period and the investor’s marginal tax rate. Higher-income earners who held assets through lower inflation may find the old 50% discount was more favourable. Lower-income earners who held through higher inflation may find indexation less damaging, although the 30% floor can still matter.
William Buck also notes an important quirk: if a sale price falls between the original cost base and the indexed cost base, the result may be treated as no gain and no loss. That could influence behaviour, because some investors may delay selling if the tax outcome feels unfavourable or uncertain.
Why The Government Is Making The Change
The political case for the reform is tied to housing affordability, revenue and perceived fairness. The ALP’s announcement on the tax reform bill frames the changes around workers, first home buyers and future generations. The ABC reported that the Greens backed CGT and negative gearing changes as part of a broader parliamentary deal.
The policy argument is that the 50% discount and negative gearing have encouraged investment property demand and contributed to housing affordability pressure. Whether the change actually fixes housing affordability is a separate debate, but the government is clearly aiming to make certain investment structures less attractive while also increasing revenue.
There is also a fairness argument. The episode explains the political logic as a question of whether a wage earner and a high-net-worth investor should face very different effective tax rates on the same dollar of gain. The 30% minimum floor is designed to reduce the ability to use structures and timing strategies to lower tax below that level.
Why Crypto Holders Need To Plan Early
The messy part for crypto holders is the transition period. If someone holds an asset before 1 July 2027 and sells it after that date, the gain may need to be split between the old and new systems. That means accountants may need to determine what portion of the gain arose before the cutoff and what portion arose after it.
For people who bought crypto years ago, especially through multiple wallets, exchanges, staking rewards or asset swaps, clean records will matter. The ATO’s crypto guidance on working out and reporting CGT on crypto remains essential background for understanding how disposals are treated today.
Planning Options To Discuss With An Adviser
Peter outlines several planning conversations that may be worth having with a qualified accountant or adviser. Some investors may consider realising gains before the cutoff if they were already planning to sell in the near term. Others may decide to hold through the change and accept the new treatment, especially if their personal circumstances make indexation less punitive.
Another option discussed is borrowing against assets rather than selling them, although this comes with custody, counterparty and liquidation risks. Some crypto lenders require assets to be held by a third party, which introduces a very different risk profile from self-custody.
The episode also touches on self-managed super funds. Superannuation structures may remain attractive for some long-term holders because they are taxed differently and may retain separate CGT treatment. However, moving personally held crypto into an SMSF can itself trigger a disposal, so this is firmly in the category of advice-required planning.
The key message is not that everyone should act now. It is that crypto holders should understand the deadline, organise their records and start asking better questions well before 1 July 2027.
Key Takeaways
- The current 50% CGT discount for assets held longer than 12 months is being replaced by an indexation-based approach from 1 July 2027.
- The new system includes a 30% minimum tax floor on real capital gains, which may affect investors differently depending on their marginal tax rate.
- Crypto remains subject to standard CGT rules, including disposals triggered by selling, swapping, gifting, converting to fiat or spending crypto.
- Assets held before 1 July 2027 and sold after that date may require gains to be split between the old and new systems.
- The change may create planning decisions for long-term crypto holders who already have unrealised gains.
- Some investors may consider realising gains before the cutoff, while others may prefer to hold and accept the new treatment.
- Borrowing against assets and self-managed super fund structures are discussed as options to raise with a qualified adviser.
- The episode strongly emphasises getting personal tax advice before making any CGT-related decisions.
Disclaimer: This content is for educational purposes only. Nothing in this article constitutes financial advice. Always do your own research.
Text Transcript
That 50% capital gains tax discount here in Australia is officially dead. It passed both houses of the parliament on the 25th of June this year, 2026, and will become law on the 1st of July in 2027. Every dollar of profit that you make selling your ADA, your Bitcoin, your shares, your property, whatever it is, gets taxed under the completely new system. And that’s when the 30% minimum floor also kicks in.
And this is seriously the biggest change in how Australians are taxed since 1999. So now every crypto holder out there is asking themselves, what do I do with my crypto assets? Is it a good idea to sell them beforehand? Should I just cop that new rule and pay the tax in the new system, the new setup that is coming in?
Or are there better plays out there, such as borrowing against my assets and freeing up liquidity that way? So there are potentially a lot of ideas here. And of course, this isn’t financial advice. I’m not an accountant or financial advisor.
So please seek financial advice that is best suited for your situation. But I’ve been doing some research for my own situation to find out exactly what works best for me. And maybe some of these ideas you could take to your accountant and financial advisor to try and work out what will work best for you. So let’s get into it.
Hi everyone, my name is Peter. If it’s your first time here, thumbs up, like, subscribe, notification bell. I talk all things crypto. And this week I’ll be looking specifically into some of these new tax changes and how they affect all of us crypto holders here in Australia.
Now, I’m stepping out of the regular Cardano related content that I normally talk about. And this is because on the 12th of May this year, the Australian government released the new budget. And around that, this whole new capital gain tax related things of the tax reform and everything they’re doing in that space. So I want to look at four main things in this particular topic.
I want to cover what is exactly changing in this new rule, why the government is doing it in the first place and how this hits your crypto assets specifically. And what actually are your options now that this new law is in place. So here’s the deadline. From the 1st of July, 2027, the new law does three specific things.
One, that 50% discount completely goes away. Two, it gets replaced with a cost-based indexation. That’s the system the Australian ran from, from about September 1985 to September 1999, before the Howard government brought in the 50% discount. And three, the 30% minimum tax rate applies to your real capital gains, regardless of your marginal rate.
The Baker McKenzie analysis of the budget confirms all three, and the budget papers say it’s applied broadly. Individuals, trusts, partnerships across all capital gains assets. So that’s property, shares, and yes, your crypto assets too. But there’s also a whole bunch of caveats around this.
So first off, your main place of residence, your own property that you live in, that doesn’t, that isn’t included in this. Your super fund also keeps its original one-third discount. Income support recipients, such as aged pensioners, they’re also exempt from this 30% minimum. So there are a lot of caveats that make it better for certain people and certain situations.
So just a quick refresher before we continue, especially for those people that are outside of Australia and don’t understand how our tax laws work here. So right now, if you buy an asset and hold it for more than 12 months, then sell for a gain, you only get taxed on half of that gain at your marginal rate. Example, you buy 10,000 ADA at 30, that’s $3,000 in. A few years later, you sell it at 60 cents and that’s $6,000 out.
So you have a capital gains of $3,000. Now, because you held it for more than 12 months, you only pay tax on the 1,500 of it at your marginal rate. So in Australia, we also have different marginal rates for the amount of income that you might earn. So if you’re a high income earner, you pay 47-ish percent tax.
And if you’re a little bit lower, there’s different thresholds and your tax rate will change. That’s pretty simple to follow. And the ATO confirms this on their crypto guidance page, which treats investment crypto under the standard CGT rules. And that’s all going away now.
This is what will replace it. This is a new scenario. What replaces it are two things working together. First off, the indexation.
So instead of just halving your gain, which is pretty easy to work out, they now factor in the indexation on your base price. So let’s say you bought your ADA for $3,000 five years ago. The inflation of that, let’s say five years ago to now is 20%. So now you’ve got to add in an extra 20% on top of that $3,000, which makes it $3,600.
So now that’s your base price. And then you pay tax on your gain on top of that. So now this kind of sounds like a good thing, but it’s not quite right because the second part here is that 30% minimum that you have to now pay also. So even after indexation, the tax on your real gain has a floor of 30%.
So if your marginal rate is below 30%, you get bumped up to that 30%. So if it’s already above 30%, you just pay your marginal rate. So the floor does nothing for you. But if you’re below that, you pay the 30%.
So if you don’t make much of a gain, it doesn’t give you incentive to sell because you get taxed just that bit more. So you’re kind of waiting to see if your gain will increase, if you’re going to get more of a gain by waiting a little bit longer or not. So it makes it a little bit more difficult to invest or speculate in these particular markets. So who wins and who loses?
It comes down to two things. Inflation rate during your holding period and your marginal rate. So high income earners who held through low inflation, the old 50% discount was probably better for you. But low income earners who held through high inflation indexation might actually help until the 30% floor cuts into it.
So one quirk the William Buck analysis points out, if your sell price lands between your index cost base and your original cost base, you can end up with no gain and no loss at all, which probably just means a lot of people won’t sell. Like I was saying, it just doesn’t make any sense. So why is this all happening? Why is the government even doing this?
And if you read the ALPs, notice about this passing. You can read all their PR stuff here. I’ll leave the links there. You can read it for yourself.
But here’s the quick summary for you. First off, the housing affordability thing. I have to agree, housing affordability, really hard at this point in time. And a lot of people just can’t afford their first home.
This isn’t just happening here in Australia. It’s a global phenomenon. Look at the US house prices in many regions. It’s just unaffordable.
So this is supposed to make this better for first home owners. The 50% discount and negative gearing has been blamed for the housing affordability crisis. Fairly or not for inflating property prices for two decades. The picture is that the indexation and the 30% minimum makes investing in property less attractive.
So if less people are buying property as an investment, it will open up that market for first home owners for people to actually own and occupy. Whether or not this actually fixes the housing issues is a completely different video topic and a different debate. And I’ll look into that another time. But if you want to leave your two cents, leave a comment down below.
The second thing here is the revenue. H&R Block caused this most significant CGT change since the Ralph review in 1999, when the Howard government introduced the 50% CGT tax discount. The discount was costing the budget billions a year. And with inflation at 5% forecasted by mid this year, and of course the oil shock in the global economy, we’re going to see more inflation overall.
So the government is looking for more ways to get more revenue. And third, the third argument here, the fairness side of things. The argument is a nurse on 70k and a high net worth investor with millions in shares shouldn’t pay wildly different effective rates on the same dollar of gain. The 30% floor is designed to stop high earners using trusts and timing tricks to pay less than their marginal rate.
Agree or not, the logic was consistent enough to get this through parliament in both houses. The Greens did side with Labour to push this one through. And it’s not a matter of will it be law, it is now law and we will see it come into play on the 1st of July 2027. Alright, so this is where it gets real for all of us.
The ATO, the Australian tax office, already treats crypto under the capital gains tax rules. Selling, swapping, gifting, converting it to fiat, buying goods with crypto, all are CGT events. So right now you get a 50% discount after holding for 12 months. After the 1st of July 2027, that’s gone for gains arising after that date.
But there’s a transition rule here. There’s always something in there, isn’t there? But there’s a transition rule and that’s kind of important. If you hold an asset before the 1st of July 2027 and sell after, that old 50% discount applies to the gain up to that date and the new method applies to gains after.
So if you bought some ADA in 2021 and then sold it in 2028, your tax accountant needs to split that up into what happened before the cutoff and after the cutoff. So it’s going to get really messy here and the rules and methods haven’t been really put in place yet. So they’ll work that out over the next year and we’ll get more details about that on how we are actually supposed to treat all of this. So now what are your actual options?
What can you do? I’ve got four things I’ve researched here and I’m considering for myself. So the first one here is to actually realise those gains and just to sell before this particular cutoff date. The budget confirms the 50% discount is applying gains before that date and the NAB analysis notes this gives investors a window to realise before that particular cutoff.
So if you’ve got a big unrealized gain and you are planning to sell in the next few years anyway, doing it before this deadline locks in that 50% treatment. So you can get that discount still. So you have options. You’ve got a year to think about this at the moment.
The second option is just to cop the new rule and just go with the flow. Stay invested, sell when you would have anyway, accept a lower after-tax return. For low-income earners and anyone holding through high inflation, it might not be that much worse. Remember the William Buck quirk where the index cost base ends up above your sales price?
You owe essentially nothing and we are in a high inflation period at the moment. So a lot of low-income earners could actually be better off in this situation. And option three is to borrow against your assets. There are a lot of crypto companies out there that would actually do this for you.
They hold on to your assets in a custodial way and then for that process they will give you stable coins or fiat for it. So there’s lots of options here in regards to how you can actually move your assets and make it work for you. The other big thing that you can do and you will need a professional stepping in here to help you is a self-managed super fund or a super annuation fund in general. They still have that one-third discount and aren’t hit the same way as everything else is with this new CGT rule.
And for those that are holding long-term in an SMSF, this probably starts to look a lot more attractive. Now because you can’t transfer from a self-custody wallet from a personal crypto account to an SMSF, that would trigger a sale and disposal of those assets. You can’t just move it from one to another even though you’re the same owner. You have to start buying those assets under the SMSF.
So please consult your tax accountant and your advisor around this for the best situation that will work for you. SMSFs are a great way to minimize your tax in this type of situation especially if you’re a long-term crypto holder and the SMSF allows you to do this and it’s really good. I’ve done interviews with other tax experts around SMSFs. Links in the top right hand corner for you guys.
I talked to Natalia about this who is from Easy Super. I’m not affiliated anyway with her company. I just really like her content and the way that she presents the information around SMSFs. So do check out that interview.
Okay so there was a lot overall to take in there. There’s a lot of new changes coming into place but we do have this whole year grace period to consider what to do next. Do we sell our assets now? Do we just bear and grit it depending on our tax situations?
Can we restructure and move our assets around? And some people are even taking drastic actions and moving overseas but I haven’t looked into that. There’s a lot more tax implications. There’s a disposal of tax or assets when you move overseas as well so you get taxed there too.
The government seriously is finding any way possible to tax us and it’s getting very uncomfortable. Leave a comment down below. Let me know what you guys think. What are you potentially doing here in regards to minimizing your tax footprint when it comes to this new CGT rule?
I certainly am going to be looking deeper into all my options so I can find out exactly what will work best for myself, my family and what assets I hold or what little assets I have left. The crypto markets are absolutely brutal at the moment. But anyway guys, leave a comment down below. Let me know what you guys think.
If you enjoyed this content, if you learned something new, make sure you hit that thumbs up, that subscribe button, the notification bell down below as well. I do a lot of this content on a regular basis and my YouTube memberships is what keeps me going. I also have buy me a coffee links down there as well. That’s a great way to support the content.
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But like always guys, try and stay positive. There’s a lot of things happening in the space at the moment. I’ll see you in the next video.
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