Australia to End 50% Capital Gains Tax Discount in July 2027, Increasing Crypto Tax Burden

Australia will eliminate the 50% tax discount applied to capital gains on investment assets, including cryptocurrencies. Because crypto returns are heavily driven by price appreciation, the change stands to have a comparatively larger effect on investors' tax bills.

Cointelegraph reported on November 4 that the Australian government plans to end the 50% capital gains tax, or CGT, discount from July 1, 2027. Under the current system, only half of eligible capital gains is included in taxable income. After the overhaul, income tax rates will apply to the entire gain, excluding only some inflation-related deductions.

The change does not create a separate tax on cryptocurrencies. Instead, it revises the taxation framework for investment assets more broadly. As more capital gains are reflected in taxable income, the burden on investors will vary depending on their income level and realized gains.

Chris Brickey, an analyst at Stockspot, wrote in The Australian that cryptocurrencies face the biggest increase in tax burden among 10 asset classes because almost all returns come from capital gains. That leaves even lower after-tax returns for an asset class already seen as highly speculative.

Political debate over whether to reverse the overhaul is also continuing. The opposition Coalition and One Nation have pledged to reinstate the discount. Still, with the ruling Labor Party holding a majority in the lower house, it remains unclear whether the policy will be changed.