Australia Pushes Capital Gains Tax Overhaul, Stoking Concern for Crypto Investors

Australia's proposed overhaul of capital gains tax is fueling concern that crypto investors could face a much heavier tax burden.

Cointelegraph reported on May 15 that Australia's ruling Labor Party unveiled the changes as part of its fiscal 2027 budget proposal.

The plan would set a minimum 30% tax rate on capital gains and abolish the 50% capital gains tax discount for assets held for more than 12 months.

Industry participants say the changes could significantly increase the burden on crypto investors.

Robin Singh, chief executive officer of Coinly, said a low-income investor who now pays about $3,800 in tax on a $20,000 investment gain could see that bill rise to roughly $10,200 under the new system. He added that while the proposal could theoretically prevent taxation on gains that merely reflect inflation, most crypto investors would probably end up paying more.

The plan is also raising concerns that incentives for long-term holding could weaken.

Jonathan Miller, Kraken's Australia managing director, said investors may trade more frequently and hold assets for shorter periods if tax benefits tied to long-term holding are reduced.

Andrea Yuen, co-chief executive officer of Swyftx, took a different view, saying crypto could become more widely incorporated into retirement portfolios and self-managed super funds, or SMSFs.

The proposal still must pass Australia's parliament. The new rules would apply to capital gains generated after July 1, 2027.

Angus Taylor, who leads the opposition Liberal Party, has said he would scrap the overhaul if his party returns to power in the next general election.