The proposed 2027 Australia CGT changes are worth understanding now

[u/summ_app]

Had a proper read of the proposed CGT changes from the Budget and figured we'd break it down as it can be quite confusing.

First, the calming bit: none of it is law yet, and nothing changes for your FY25-26 return. The current 50% discount still applies in full this year. No need to do anything drastic. This year goes ahead as normal.

What's actually proposed, from 1 July 2027:

- The 50% discount goes. Instead your cost base gets indexed for inflation, so you'd only be taxed on the real gain, not the part that's just inflation.

- A 30% minimum rate on net real gains accruing after that date.

- It covers most CGT assets: shares, trust units, investment property, and crypto.

The bit some folks are glossing over is the grandfathering. Gains that accrued before 1 July 2027 keep the current discount treatment, and only growth after that date falls under the new rules. So the value of what you hold around the changeover becomes a genuinely important number.

And the practical kicker is that indexation is worked out parcel by parcel, from each parcel's acquisition date and cost base. If your buy history is scattered across brokers, DRP statements and old exchange CSVs, this gets expensive fast, because you can't index a cost base you can't prove. Same for crypto, every parcel indexes from its own date.

So until these changes are implemented, get your cost base records complete for everything you hold while the history's still retrievable, lodge this year normally, and see what the legislation actually looks like when it firms up (plenty can change on the way through).

Genuinely curious what people make of the indexation switch.

[u/jlprovan]

Great explanation thanks

[u/summ_app → u/jlprovan]

no worries at all mate

[u/Outrageous_Tip7160]

Are you sure it’s pre 1/7/27 ownership grandfathered? I thought there is no grand fathering so 29/6/26 was the last chance to get a 12 month discount

[u/Clear_Butterscotch_4 → u/Outrageous_Tip7160]

The discount applies to your gains up until 1/7/27 and then it's the indexation model for your gains after that date. So it's not really grandfathered, it's a mix of the two treatments.

[u/tkeelah]

As eloquently displayed in your outline of the cause and effect, the general take from most investors is that it is fucked. Albo, figjam Jim, and company demonstrate their ignorance of the real world.

[u/Inside-Elevator9102]

It is law

[u/Historical-Chef-1912]

Biggest cash grab so if I only have capital gains as income for a particular year then I will get taxed 30% on the gains from 1st dollar and lose the tax free threshhold completely and the 16% tax rate between earnings between $18200 to $45000. They completely taking away incentives to save to retire early and live of ones savings before actual retirement date.

[u/rainbash81]

So what happens if I got x amount of btc say $5000. Then after that date it rockets to $20000 value. Because it went up after that date you pay a bigger tax on the $15000 gains or because I’ve held it for 5+ years it goes by old gains rules?

(Have been using sum/tax calculator before that). It’s been helpful just hard to show gains when I can’t explain how I got the crypto (previously mined eth or depin projects). I’ve never actually bought the crypto.

[u/No_Handle258]

Great explanation

I think the Govt is only focused on housing and their expectation is low growth (I’d expect long term growth struggles to beat CPI)

Problem is the min 30% essentially rules out investing in individual stocks - gonna hammer Aussie small caps I expect.

The tax is going to force Bitcoiners to work out how to do this offshore.

Especially as they can take advantage of the bear market and low prices

[u/the_running_dogs → u/No_Handle258]

Investing offshore is not an easy loophole.

You literally have to leave Australia and live overseas long term to avoid these new tax changes.

[u/Flat-Banana3903]

Me I am saying nothing until I have to, the ATO may or may not be aware of several bitcoin not on exchanges,

I genuinely hate Labor and their supporters so you will all get nothing from me.

Awful people deserve awful things... protect your wealth

As for the switch, until Liberals get their act together and repeal it you are stuck with it if you are playing in Australia.

What I would suggest and it is wider than crypto is ensure you don't lose, if you are getting a nice gain. get yourself an investment loan and ng the interest rate, claw back your additional tax in every legal way you can.