Australia's New CGT Rules: What Crypto Holders Need To Know Before 1 July 2027

Australia's capital gains tax rules are changing from 1 July 2027, and the shift could matter for anyone holding crypto, shares, property or other investment assets. In this episode, Peter walks through what is changing, why the government is making the change, and how the move from the 50% CGT discount to indexation plus a 30% minimum tax floor may affect Australian crypto investors.

The episode covers the current CGT treatment for crypto, how long-term holders currently access the 50% discount, what the new indexation model is designed to do, and why the transition period could create messy gain-splitting calculations for assets held before and after 1 July 2027. It also looks at practical planning conversations to have with an accountant, including whether to realise gains before the cutoff, hold through the change, borrow against assets, or explore superannuation structures.

This content is general education only and is not financial, legal or tax advice. Speak with a qualified accountant or financial adviser before making decisions about selling, restructuring or borrowing against crypto assets.

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.

Links & References:
- Tax reform bill passes the Parliament: https://link.learncardano.io/HfEtiC
- Greens back CGT, negative gearing changes in return for extended NDIS inquiry, end to super loophole - ABC News: https://link.learncardano.io/SQig5Z
- Federal Budget 2026–27 | Insight | Baker McKenzie: https://link.learncardano.io/G6bprx
- Federal Budget Analysis 2026 | Capital Gains Tax - William Buck Australia: https://link.learncardano.io/m8W6Ox
- https://link.learncardano.io/LXjMqw
- https://link.learncardano.io/E5WvMt
- https://link.learncardano.io/CEFrM5

Website: https://link.learncardano.io/bQ68Rc
X/Twitter: https://link.learncardano.io/3a1Qtv

Disclaimer: This content is for educational purposes only. Nothing constitutes financial advice.

DISCLAIMER: This content is for informational and educational purposes only and is not financial, investment, or legal advice. I am not affiliated with, nor compensated by, the project discussed—no tokens, payments, or incentives received. I do not hold a stake in the project, including private or future allocations. All views are my own, based on public information. Always do your own research and consult a licensed advisor before investing. Crypto investments carry high risk, and past performance is no guarantee of future results. I am not responsible for any decisions you make based on this content.

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Episode Transcript

Speaker 1 (00:00):
That fifty percent capital gains tax discount here in Australia
is officially dead. It passed both houses of the Parliament
on the twenty fifth of June this year, twenty twenty six,
and will become law on the first of July in
twenty twenty seven. Every dollar of profit that you make
selling your EIA, your bitcoin, your shares, your property, whatever

(00:21):
it is, gets tax under the completely new system. And
that's when the thirty percent minimum floor also kicks in.
And this is seriously the biggest change in how Australians
are taxed since nineteen ninety nine. So now every crypto
holder out there is asking themselves what do I do
with my crypto assets? Is it a good idea to

(00:43):
sell them beforehand? Should I just cop that new rule
and pay the tax in the new new system then
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

(01:06):
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. Hey everyone,
my name is Peter. If it's the first time here,
thumbs up light subscribe notification bell. I took all things

(01:28):
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 Kadano related content that I normally
talk about, and this is because on the twelfth of
May this year, the Australian government released their new budget
and around that this whole new capital gain tax related

(01:51):
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 cut 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

(02:11):
options now that this new law is in place. So
here's the deadline from the first of July twenty twenty seven,
the new law does three specific things. One, that fifty
percent discount completely goes away. Two, it gets to place
with a cost based indexation. That's the system the Australian
ran from from about September nineteen eighty five to September

(02:34):
nineteen ninety nine before the how A government brought in
the fifty percent discount. And three, the thirty percent 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

(02:58):
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 resonance, your own property
that you live in that doesn't this is that isn't
included in this. Your superfund also keeps its original one
third discount. Income support recipients such as age pensioners, they're

(03:18):
also exempt from this thirty percent 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 twelve months then sell for a gain,

(03:41):
you only get taxed on half of that gain at
your marginal rate. Example, you buy ten thousand and eight
out thirties, that's three thousand dollars in a few years later,
you sell it at sixty cents and that's six thousand
dollars out So you have a capital gains of three
thousand dollars now because you held it for more than

(04:01):
twelve months, you only pay tax on the one thousand,
five hundred 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 forty seven 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,

(04:24):
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, they're indexation. So instead of
just halving your gain, which is pretty easy to work out,

(04:44):
they now factor in the indexation on your base price.
So let's say you bought your Aida four three thousand
dollars five years ago. The inflation of that let's say
five years ago to now is twenty pits. Now you
got to add in an extra twenty percent on top
of that three thousand, which make it three thousand, six hundred.
So now that's your base price, and then you pay

(05:04):
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
thirty percent minimum that you have to now pay. Also,
so even after indexation, the tax on your real gain
has a floor thirty percent. So if your marginal rate
is blow thirty percent, you get bumped up to that

(05:27):
thirty percent. So if it's already above thirty percent, you
just pay your marginal rate, so the flow does nothing
for you. But if you blow that, you pay the
thirty percent. 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

(05:48):
to get more of a gain by waiting a little
bit longer, or 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 fifty percent discount was probably

(06:12):
better for you, But low income earners who held through
high inflation, indexation might actually help until the thirty percent
floor cuts into it. So one correct the William Buckanalis's
points out, if your cell price lands between your index
cost base and your original cost base, you can end

(06:33):
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 has 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,

(06:55):
but here's the quick summary for you. First off, the
housing affordability thing. I have to agree the 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

(07:17):
home owners. The fifty percent 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 thirty percent minimum makes investing
in property less attractive, So if less people are buying

(07:37):
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 you two cents, leave a comment down below.

(07:58):
The second thing here is the revenue H and R
block caused this most significant CGT change since the Route
review in nineteen ninety nine, when the Howard government introduced
the fifty percent CGT tax discount. The discount was costing
the budget billions a year, and with inflation at five
percent forecasted by mid this year, and of course the

(08:20):
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 seventy k and a high net worth investor
with millions in shares shouldn't pay wildly different effective rates

(08:42):
on the same dollar of gain. The thirty percent floor
is designed to stop high earners using truss 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 so with labor to
push this one through. And it's not a matter of

(09:04):
will it be law. It is now, Laura, and we
will see it come into play on the first of
July twenty twenty seven. All right, So this is where
it gets real for all of us. The ATO, the
Astrounding Tax Office already treats crypto under the capital Gains
Tax rules, selling, swapping, gifting, converting it to fits, buying

(09:25):
goods with crypto, all our CGT events. So right now
you get to fifty percent discount after holding for twelve
months after the first of July twenty twenty seven. 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.

(09:47):
If you hold an asset before the first of July
twenty twenty seven, and so after that old fifty percent
discount applies to the gain up to that date, and
the new method applies to gains after. So if you
bought some EIGHTA in twenty twenty one and then sold
it in twenty twenty eight, your tax accountant needs to
split that up into what happened before the cutoff and

(10:10):
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

(10:32):
for myself. So the first one here is to actually
realize those games and just to sell before this particular
cutoff date. The budget confirms the five percent discount is
a playing games before that date, and the NAB analysis
notes this gives investors a window to realize before that
particular cutoff. So if you've got a big unrealized gain

(10:52):
and you are playing to sell in the next few
years anyway, doing it before this deadline locks in that
fifty percent treatment, so you hand 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

(11:12):
lower accept a lower after tax return. For lower 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 seals price,
you owe essentially nothing, and we are in a high
inflation period at the moment. So a lot of low

(11:34):
income earners could actually be better off in this situation.
An 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 fear it for it.

(11:55):
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 superfund or a super
annuation fund. In general, they still have that one third
discount and aren't hit the same way as everything else

(12:18):
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 will trigger a sale and
disposal of those assets. You can't just move it from

(12:38):
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

(13:00):
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

(13:22):
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

(13:45):
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 tax there too. The government seriously is finding
any way possible to tax us, and it's getting very uncomfortable.

(14:07):
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 of my options so I can find
out exactly what will work best for myself, my family
and what the assets I hold or what little assets

(14:29):
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 learn something new, make sure you
hit that thumbs up. That's a subscribe button the notification
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(14:51):
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and stay positive. There's a lot of things happening in
the space at the moment. I'll see you in the
next video.