What the 2026 Federal Budget Actually Changed
Yesterday's Federal Budget announced one of the most significant changes to capital gains tax in decades. From 1 July 2027, the 50% CGT discount available to individuals holding assets for more than 12 months will be replaced by an inflation adjusted cost base (indexation) and a new minimum 30% tax rate on capital gains.
The practical effect for most investors: gains will be taxed more heavily than under the current system. Under the existing rules, an individual on a 47% marginal rate holding an asset for over 12 months pays tax on only half the gain, giving an effective rate of 23.5%. Under the new rules, the minimum tax on the gain is 30%, and for higher income earners it will be higher still.
This change applies to all asset classes other than new residential property, which receives a carve-out to protect housing supply incentives. That means shares, managed funds, ETFs, and physical gold are all affected.
The announcement has dominated financial news coverage overnight. Most of it is focused on investment properties and shares. The gold angle has been almost entirely overlooked.
Gold Is Directly Affected: Here Is the Plain English Version
Physical gold bullion is a capital asset under Australian tax law. When you sell gold at a profit, you pay CGT on the gain. The current rules have applied since 1999: hold for more than 12 months and you pay tax on only 50% of the gain. That 50% discount disappears on 1 July 2027.
Here is a concrete example. You buy 1 oz of gold today at A$4,800. You sell it in 2029 for A$6,000. Your gross capital gain is A$1,200.
Under the current rules, with a sale before 1 July 2027: your discounted gain is A$600. At a 47% marginal rate, you pay A$282 in tax.
Under the new rules, with a sale on or after 1 July 2027: your gain is recalculated using an indexed cost base adjusted for inflation. The minimum tax on the resulting gain is 30%. In most scenarios, this results in a higher tax bill, particularly for investors in the early years before significant inflation indexation has accumulated.
The government has indicated that indexation will use CPI. In practice, if CPI runs at 3% per year, a two-year holding period would generate approximately A$288 in indexation relief on a A$4,800 purchase. For investors in a 32% or higher marginal rate, the new rules are almost always worse than the current 50% discount.
The SMSF Exception: The Most Important Detail for Gold Investors
One critical exception was announced alongside the main change: complying superannuation funds, including self-managed superannuation funds (SMSFs), will retain access to the one third CGT discount.
This changes the relative attractiveness of gold held inside superannuation versus gold held personally.
Under the current rules, both an SMSF and an individual investor receive a 50% CGT discount on assets held more than 12 months. From 1 July 2027, that parity disappears. The SMSF discount continues at one third. The personal investor faces indexation and a minimum 30% rate.
For SMSF trustees who are reviewing their fund's gold allocation, this is a material consideration. Gold held inside an SMSF from 2027 onwards will be taxed more favourably than gold held personally. For members in the accumulation phase, the combination of the concessional tax rate (15%) and the retained one third discount creates a significantly lower effective CGT rate than personal ownership.
If you are an SMSF trustee and gold is not currently part of your investment strategy, this budget has made it comparatively more attractive. Speak to your fund's accountant before making any changes. Our guide to buying gold in an SMSF covers the mechanics of SMSF gold ownership in detail.
The 13-Month Window Before the Rules Change
The 50% CGT discount remains fully available for all assets purchased and sold before 1 July 2027. That is a 13-month window from today.
Investors who buy gold now and sell before that date are still operating under the existing rules. There is no requirement to have purchased before a certain date. The only requirement is to have sold before 1 July 2027 while having held the asset for more than 12 months.
This creates a practical consideration for short to medium term investors. Anyone planning to hold gold for less than two years may want to structure their purchase and sale timing to fall within the current discount regime. A purchase made in May 2026 and a sale in, say, March 2027 would still qualify for the 50% discount, provided the 12-month holding period is satisfied.
For longer term holders, the calculus is different. Gold bought today with a 5 or 10-year horizon will be sold under the new rules regardless. In that scenario, the SMSF structure becomes more compelling if you have the ability to increase contributions or adjust your investment mix inside super.
It is also worth noting that the new indexation system does provide some relief for long term holders. The longer you hold, the more CPI indexation accumulates, reducing the nominal gain subject to tax. For very long holding periods, indexation may ultimately be comparable to or better than the 50% discount depending on future inflation rates.
Does This Affect Silver, Gold ETFs, and Mining Shares?
The 2026 CGT changes apply to all capital assets held by individuals, not just physical gold. Silver bullion, gold ETFs listed on the ASX, and shares in gold mining companies are all subject to the same new rules from 1 July 2027.
For silver investors, the situation has an additional layer. Silver already attracts 10 percent GST on purchase, which investment gold does not. Combined with the post-2027 CGT changes, the after-tax return on silver held personally becomes less favourable on both the entry and exit side of the transaction. Our GST on silver guide explains the GST component in detail.
For investors holding gold via ASX-listed ETFs, the same CGT rules apply as for physical gold. ETFs are capital assets, and gains from selling ETF units are taxed identically to gains from selling physical bullion. The advantage of ETFs is convenience and liquidity, not preferential tax treatment.
Shares in gold mining companies are also affected. Mining shares have always been treated as ordinary shares for CGT purposes. The removal of the 50% discount increases the after-tax cost of realising gains on mining shares just as it does for physical gold and gold ETFs. Investors who hold a mix of direct bullion, ETFs, and mining shares should review each position separately.
What This Means for the Gold Market
CGT changes of this scale have historically had observable effects on physical asset markets. When investors anticipate less favourable tax treatment, some portion of demand moves forward as buyers act now to lock in better conditions. The 1999 introduction of the current CGT discount regime itself triggered noticeable buying activity in the months before it took effect.
Gold demand in Australia has already been elevated in 2026 against a backdrop of global uncertainty, high AUD gold prices, and increasing interest from SMSF trustees. Budget-driven urgency may add a further layer of buying activity between now and mid-2027.
This does not change the fundamental case for gold, which rests on its role as a store of value and inflation hedge. But for investors who were already considering adding gold to their portfolio, the CGT window adds a time dimension to that decision that did not exist last week.
Compare today's gold prices from all major Australian dealers to find the lowest premium currently available.
Practical Action Steps by Investor Type
The right response to these changes depends on your specific situation. Here is a plain English guide for four common investor types.
If you hold gold personally and plan to sell within the next 13 months: confirm your holding period exceeds 12 months and aim to complete the sale before 1 July 2027 to preserve access to the 50% discount. This is the most straightforward path for investors already close to their planned exit.
If you are a long-term personal gold holder with no near-term plans to sell: consider whether moving future gold purchases into your SMSF makes sense. From 2027, the SMSF structure offers a significantly lower effective CGT rate than personal ownership. Speak to your fund's accountant about the mechanics and contribution rules before acting.
If you have not yet bought gold and are considering it now: the timing of your first purchase matters less than the structure you buy through. Personal ownership will face the new rules on any sale after July 2027. SMSF ownership will continue to benefit from the concessional tax environment regardless of when the rules change.
If you already hold gold inside an SMSF: no action is required. Your fund retains the one-third CGT discount and the concessional 15% tax rate. The new rules make your existing structure relatively more attractive compared to personal ownership, which is a positive development.
Use our gold and silver calculator to estimate the current spot value of any existing holding, and compare live buy prices on our gold coins and gold bars pages.
Disclaimer and Next Steps
This article is for general informational purposes only and does not constitute financial, tax, or legal advice. Capital gains tax treatment depends on your individual circumstances, the type of entity holding the asset, and legislative changes that may occur before 1 July 2027. Consult a registered tax agent or financial adviser before making any investment decisions based on anticipated tax changes.
Key sources: Australian Federal Budget 2026 to 2027 papers, Australian Taxation Office CGT guide (ato.gov.au), Treasury consultation documents on CGT reform.
To compare live gold prices from Perth Mint, ABC Bullion, Ainslie, and other major Australian dealers, visit our gold coin comparison page and gold bar comparison page. Prices update throughout the trading day.
