Headline: Australia set to end 50% crypto CGT discount — one-year transition window announced
Australia is poised to overhaul its capital gains tax rules in next week’s 2027 budget, with a major change likely to hit long-term crypto investors, shareholders, landlords and business owners.
What’s changing
- The Albanese government is expected to remove the current 50% capital gains tax (CGT) discount for assets held more than 12 months — a rule that today applies to crypto as well as shares, property and business assets.
- In its place, gains would be taxed in full but adjusted for inflation over the holding period (a “real gain” model).
- The reform would take effect in July 2027.
Transition mechanics and timing
- A one-year grace period has been flagged to soften the blow: assets acquired after May 10 will fall into the transition window.
- For assets bought before May 10, the final tax bill would be calculated proportionally, based on how long they were held under the old and new regimes.
Who reported it
- The Australian Financial Review first reported the plans, citing sources familiar with the budget. The government is set to deliver its fiscal 2027 budget on Tuesday.
Market reaction and implications
- Crypto holders face a direct hit: under the current rules, holding bitcoin or other digital assets for more than 12 months halves the taxable gain. Under the proposed model, the entire gain — minus an inflation adjustment — would be taxable.
- For some high-income investors whose gains only slightly exceed inflation, the tax increase could be sizeable.
Voices from the market
- Scott Phillips, CIO at The Motley Fool, said investors will likely pay more tax but should still see meaningful returns: “When people say a CGT change would hit founders and growth investors, they’re not wrong. But implicit in that argument is that those groups will be making a motza in the first place. That’s all the incentive they will need.”
- Chris Joye, portfolio manager at Coolabah Capital, warned the move would effectively double the tax rate on certain productive assets — estimating an increase from around 23.5% today to roughly 46–47% — and could push investors toward owner-occupied housing, which remains CGT-free.
Bottom line
If confirmed in Tuesday’s budget, the reform would reshape incentives across asset classes and raise the tax burden for long-term holders of crypto, shares, property and business assets. The one-year transition limits immediate disruption, but for many investors the clock is already running.
Source: Australian Financial Review; quotes from market figures including Scott Phillips (The Motley Fool) and Chris Joye (Coolabah Capital).
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