The Budget, Bitcoin and the End of the Discount

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Taking a break from the Q2 Outlook report breakdown, today we cover the highly anticipated and widely discussed 2026–27 Australian Federal Budget. The government has officially handed down its plan, and as expected, it fundamentally rewrites the rules for capital gains. While headlines are heavily focused on property and negative gearing, the confirmed changes to Capital Gains Tax (CGT) represent a structural shift for every digital asset holder in Australia.

Please keep in mind we are not tax advisors or advisors of any kind; this is just an informative piece to provide the key updates and how they may affect your crypto holdings.

The government has confirmed it will replace the long-standing 50% CGT discount for assets held over 12 months with a return to a cost base indexation model. Additionally, a new 30% minimum tax will apply to net capital gains starting 1 July 2027. This marks the end of a simplified era, moving the system back toward taxing “real” gains adjusted for inflation—a departure from the blanket discount model that has dominated the landscape since 1999.

What This Means for Your Bitcoin

For long term Bitcoin holders, the math has now officially changed. Under current rules, a $10,000 profit on BTC held for over a year sees only $5,000 added to your taxable income.

The New Calculation: From July 2027, you will instead index your purchase price to inflation. For example, if you bought $100 of BTC and it rose to $110 while inflation was 2%, you would be taxed on the $8 gain above the indexed cost of $102, rather than just $5 under the old 50% discount.
Inflation Dynamics: While this protects you against currency devaluation, if Bitcoin outpaces inflation significantly, your taxable gain — and the associated tax bill — could be notably higher than under the old 50% discount.
The Transition Window: The new regime only applies to gains arising on or after 1 July 2027. For assets held before this date, the 50% discount still applies to gains accrued up to 30 June 2027.
A Closing Window: The transition period creates a unique window for investors. Assets acquired before the July 2027 deadline still qualify for the 50% discount on gains accrued up to that point. As the market moves toward a more complex model, current rules offer a level of simplicity that is officially on a countdown.
Valuation Requirements: Investors will need to document the market value of their holdings as at 1 July 2027 to establish a new cost base for the indexation period.
SMSF Stability: At this stage, there is no expected change to the CGT discount for superannuation funds. This makes Self-Managed Super Funds (SMSFs) a vital tool for maintaining long-term financial sovereignty.

This is not a call to sell or buy or provide any tax advice, but a reminder that the environment is evolving. At Stormrake, we view Bitcoin as a tool for financial autonomy. While tax laws shift, the underlying value proposition of a borderless, permissionless asset remains unchanged.

Stormrake Spotlight: Pax Gold (PAXG) ($4,713)

Source:https://www.tradingview.com/x/0yWlwPsH/

The bears have attempted to thwart the bullish breakout with the pullback over the last 24 hours, but the bulls managed to have an intraday bounce back to get back above the moving averages. This week seems to be the week where the bulls may finally be able to reclaim momentum.

BTC/USD Key Levels and Price Action:

Source:https://www.tradingview.com/x/Rada7vI3/

Bitcoin has fallen back to the key support level at $80.6k as the bears have wrestled back momentum on the very short term time frame. This is a key decision point for BTC. If we see a sustained move below this level as well as the moving averages, it would give the bears control of the near term and look to send BTC back into the upper $70k regions.

However, a hold of this level should see the bulls end this little pullback and send BTC higher to create new highs.

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*All prices are denominated in USD unless stated otherwise*

Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.

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