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

Australia is considering scrapping a 50% capital gains tax discount for long-term investment assets, including cryptocurrencies, and replacing it with an inflation-indexed tax regime, Cointelegraph reported. The change could increase the tax burden on long-term investors.

Prime Minister Anthony Albanese's government plans to include the proposal in the fiscal 2027 budget due on May 13, according to the report.

Under the current system, only half of capital gains are subject to tax when assets such as stocks and cryptocurrencies are held for more than 12 months. The proposed framework would replace that flat discount with a system that factors in inflation over the holding period and taxes the entire real gain.

The overhaul could have the biggest effect on long-term investors and higher-income investors. Even if taxes are calculated on gains excluding inflation, removing the existing 50% discount could still leave investors with a higher tax bill.

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 could divert investment capital toward owner-occupied housing, which benefits from tax exemptions, rather than companies or commercial real estate, he added.

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

The new tax system is set to take effect in July 2027, the report said. Assets acquired before May 10, 2026, would remain partly covered by the current system, while assets purchased after that date would receive a one-year transition period.