Australia is reportedly preparing to scrap its 50% capital gains tax discount for crypto and other long-held assets.
Crypto News
The Australian government is preparing to scrap the current 50% capital gains tax (CGT) discount on assets held for more than 12 months, replacing it with an inflation-indexed model that taxes full real gains over the holding period. The change is expected to be included in the Albanese government's fiscal year 2027 budget, set for release on Tuesday, according to a report by the Australian Financial Review citing people familiar with the budget.
Under the existing framework, Australian investors holding crypto and other assets for over a year qualify for the 50% CGT discount. The proposed indexation model would eliminate that discount and instead calculate taxable gains by adjusting the original cost base for inflation over the holding period. Long-term holders of assets with low inflation-adjusted returns would face the sharpest increase in tax obligations under the new system.
Chris Joye, portfolio manager at Coolabah Capital Investments and a columnist at the AFR, argued that the change would effectively double the capital gains tax on productive businesses and assets, raising the effective rate from approximately 23.5% to 46-47%. He said on X that investors would respond by shifting capital away from shares, commercial property, and private businesses toward owner-occupied housing, which remains tax-exempt. "The single biggest winner from the budget: the tax-free owner-occupied home, which is where people will put their money," Joye wrote.
The budget changes are scheduled to take effect at the end of the fiscal year in July 2027. A one-year grace period applies to assets acquired after May 10, during which the existing 50% discount will remain in place. Assets purchased before May 10 will be partially exempt, with the applicable CGT discount calculated proportionally based on how long the asset was held under each tax regime.
Scott Phillips, chief investment officer at The Motley Fool Australia, offered a different perspective. He acknowledged that investors will likely pay more tax under the proposed changes but argued that the incentive to invest remains intact, given that any meaningful CGT liability implies substantial underlying gains. "Not for nothing, but when people say a CGT change would hit founders and growth investors, they're not wrong," Phillips wrote on X. "But implicit in that argument is that those groups will be making a motza in the first place. That's all the incentive they will need."
The proposed reforms cover crypto assets alongside equities, private equity, and real estate, placing digital assets directly within the scope of the wider taxation overhaul. No separate carve-out for crypto has been reported.
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