In short
- Silver bullion is silver you can hold, valued by its weight and purity: bars, coins and rounds.
- Investment silver of 99.9% purity, bought as bars or bullion coins from a dealer, carries no GST in Australia.
- Silver takes far more room than gold for the same money, so where you keep it matters from day one.
- A bar held in your name and a share of a pooled pile are treated differently by the law.
If you have been looking at silver and wondering whether to buy a bar or a coin, and where on earth you would keep it, you are asking the right questions first.
Bars, coins and rounds
A silver bar is a plain block of metal, stamped with its weight and purity. It is the simplest way to hold silver by weight.
A silver bullion coin is struck by a mint and carries a face value. Australian bullion coins are legal tender, but only at the face value stamped on them, which is far below the value of the metal. You are paying for the silver, not the face value.
A round looks like a coin but is made by a private maker and has no face value.
Silver is sold by the troy ounce and by the kilogram.
A troy ounce is about 31.1 grams.
What GST does and does not cover
In Australia, buying investment gold (99.5% pure), silver (99.9%) or platinum (99%) as bars, wafers or bullion coins from a dealer carries no GST. Collector and proof coins are not counted as investment metal, so GST can apply to them.
That one line matters. A pretty coin in a presentation box may cost you GST that a plain bar of the same weight would not.
| Form | GST from a dealer |
|---|---|
| Silver bar, 99.9% pure | No GST |
| Silver bullion coin, 99.9% | No GST |
| Collector or proof coin | GST can apply |
In words: a silver bar of 99.9% purity carries no GST when you buy it from a dealer. A silver bullion coin of 99.9% purity carries no GST either. A collector or proof coin is not counted as investment metal, so GST can apply to it.
Why silver takes room
For the same amount of money, you hold far more silver by weight than gold. A few thousand dollars of gold fits in your palm. The same money in silver is a heavy box. That is why storage is part of the silver decision from the start, not an afterthought.
Where you can keep it
You have three broad choices: at home, in a bank’s safe deposit box, or with a vault that holds it for you. Each trades cost against convenience.
The law sees vault storage in two ways. Metal held for you as a share of a pooled pile may be an interest in a managed investment scheme, which is a financial product. A particular bar held for you in your name is unlikely to be. Buying bullion outright is not treated as making a financial investment, so the bar itself is not a financial product under that part of the law.
| Where it is kept | A particular bar yours? | How the law sees it |
|---|---|---|
| At home | Yes | Your property |
| Bank safe deposit box | Yes | Your property |
| Vault, bar in your name | Yes | Unlikely to be a financial product |
| Vault, share of a pool | No, a share of the pile | May be a financial product |
In words: silver kept at home or in a bank safe deposit box is your own bar and your own property. A bar held in a vault in your name is still your bar, and is unlikely to be a financial product. A share of a pooled pile in a vault is not a particular bar; it is a share, and it may be a financial product.
If you are weighing the Perth Mint, one point is worth knowing. The Western Australian Government guarantees what the Perth Mint owes its customers under its Act, such as gold it must pay for or deliver to them. The guarantee is on what the Mint owes; it is not a guarantee on bars or coins you already hold.
When you buy and when you sell
Bullion dealers are covered by Australia’s anti-money laundering law. A dealer reports any cash payment of $10,000 or more to AUSTRAC, the financial intelligence agency, and must check who you are on larger purchases.
If you sell for more than you paid, capital gains tax can apply. Today, if you are an Australian resident and have held the silver for at least 12 months, the CGT discount applies; the law changes that discount from 1 July 2027. Coins can be “collectables” under the tax law, which has its own rules; whether a bullion coin held as an investment counts as one is not settled by the ATO’s guidance, so it is one to raise with your accountant.
Silver in a self-managed super fund has a test of its own. In a self-managed super fund, a bullion coin is treated as a collectable only if it is worth more than its face value and sells for more than the spot price of the metal in it. Collectables carry extra rules, such as insurance in the fund’s name within seven days.
Why silver is different from gold
Gold is mostly held. Silver is held, and it is also used in industry.
Silver is my preferred metal, because of its use. My view is that much of it is used up in technology and never recovered; it is not just a store of value like gold. I could be wrong. It’s just an opinion, and you don’t have to agree with it.
What comes next
The next lesson in the series will look at physical gold and paper gold: what you hold when you own a bar, and what you hold when you own a promise.
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Nicholas holds some of the assets discussed in this article.
Education only, not personal or financial advice.