Australia plans to scrap its 50% capital gains tax discount for crypto, replacing it with an inflation-indexed model that could raise investor tax burdens

Australia’s federal government is preparing to overhaul how capital gains tax (CGT) is calculated on long‑term assets, including cryptocurrencies, by scrapping the current 50% CGT discount for assets held more than 12 months and replacing it with an inflation‑indexed “cost‑base indexation” model from 1 July 2027. Under today’s rules, individual investors who hold crypto or other CGT assets for over a year can reduce their taxable capital gain by half, but under the proposed system, the asset’s cost base would instead be adjusted for inflation (using CPI), and investors would be taxed on the full real gain above inflation, with an additional minimum 30% tax on capital gains from that date. The reform is expected to be detailed in the Albanese government’s 2027 federal budget and would apply broadly across asset classes—equities, real estate, private equity and crypto assets, which the Australian Taxation Office (ATO) already treats as property subject to CGT when sold, swapped, or spent. A one‑year grace period is planned for assets acquired after 10 May (under the budget timeline), during which the 50% discount still applies, while assets bought before that date would receive a pro‑rated CGT discount based on how long they were held under each regime. Market commentators such as Coolabah Capital’s Chris Joye have argued the change could nearly double the effective tax rate on long‑term, productive assets, while crypto‑tax specialists and exchanges warn that long‑term crypto holders and lower‑income investors may experience materially higher tax burdens and less incentive to hold for the long term. The package remains a proposal and would need to pass Parliament before taking effect.

✨ AI-generated background, compiled from web sources — not editorial content.

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• Capital gains tax in Australia - Wikipedia (en.wikipedia.org)
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• Indexing the cost base | Australian Taxation Office (ato.gov.au)

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