Australia Plans Crypto Capital Gains Tax Overhaul That May Raise Costs for Long-Term Holders

Australia is preparing to overhaul capital gains tax rules for long-term investment assets, including cryptocurrencies, by scrapping the current 50% discount and introducing an inflation-indexed system, Cointelegraph reported. The move has sparked concern that long-term investors could face higher tax bills.

Cointelegraph reported on May 11 that Prime Minister Anthony Albanese’s government plans to include the reduction of the existing 50% capital gains tax discount in its fiscal 2027 budget, which is due to be released on May 13.

Australia currently taxes only half of a capital gain when assets such as stocks and cryptocurrencies are held for more than 12 months. The proposed system would replace that simple discount with a framework that accounts for inflation over the holding period and taxes the full real gain.

The overhaul could hit long-term investors and high-income earners the hardest. Even if tax is calculated on gains excluding inflation, removing the 50% discount may still leave investors paying more.

Chris Joye, portfolio manager at Coolabah Capital Investments, wrote on X that capital gains taxes on productive assets and business investment could effectively double. That, he wrote, could divert investment money toward owner-occupied housing, which carries tax advantages, rather than companies or commercial real estate.

Scott Phillips, chief investment officer at advisory firm The Motley Fool, took a different view. Investors would still have an incentive to invest as long as the expected returns remain attractive, even if they pay more tax, he said.

The report said the new tax regime would take effect in July 2027. Assets acquired before May 10, 2026, would retain part of the current system, while assets purchased afterward would receive a one-year grace period.