Australia has scrapped the 50% capital gains tax break for long-term cryptocurrency holders. The change takes effect on July 1, 2027, under the Treasury Laws Amendment Bill 2026, passed this week. Forbes reported the move as the biggest overhaul of the country's capital gains tax system in 25 years.
Under current rules, investors who hold a crypto asset for more than 12 months pay tax on only half their gain. A $20,000 profit becomes $10,000 of taxable income. That simple discount ends in 2027. In its place comes a two-part system: cost-base indexing linked to inflation and a minimum 30% tax rate on capital gains.
The new method adjusts the purchase price for inflation, so the taxable gain shrinks when prices rise. But the floor of 30% ensures investors always pay at least that rate on the gain – even if the indexing would push the effective rate lower.
Gains earned before July 1, 2027 stay under the old rules. That means long-term holders must calculate gains from two periods separately: pre-cutoff and post-cutoff. Record-keeping becomes critical. Investors need to document the purchase date, acquisition cost, number of holdings, and the fair market value of each asset as of the transition date.
That is harder for those holding crypto in personal wallets or thinly traded tokens. Pricing and documentation on July 1, 2027 may be difficult to establish for assets without a liquid market. Forbes urged investors to organize transaction records well before the deadline and compare their tax burden under both systems.
For some long-term holders, selling before July 2027 may lock in the old discount. The advantage depends on the holding period and the inflation adjustment effect. The decision is not universal – each asset and position will carry a different breakeven point.
The bill locks in a clear timeline. Investors who want to preserve the current tax treatment have roughly one year to act. After that, Australia's crypto tax landscape shifts to indexed cost basis with a hard rate floor.
Australia to end 50% cryptocurrency tax discount in 2027
Australia will end the 50% capital gains tax discount for long-term cryptocurrency holders from July 1, 2027, replacing it with cost-base indexing and a minimum 30% tax rate. This change increases tax complexity and potential burden for crypto investors, especially long-term holders.