Australia’s 2027 federal budget is expected to eliminate the 50% capital gains tax discount for assets held longer than 12 months, including cryptocurrency. Under the proposed model, the full real gain — adjusted for inflation over the holding period — would be taxed. The changes are scheduled to take effect in July 2027, but a transition window has already opened for assets acquired after May 10, 2026.
What the budget proposes
The scrapping of the 50% CGT discount marks a major shift for Australian investors. Currently, individuals can halve their taxable capital gain on assets held more than a year. The new system would apply a inflation-indexed cost base, effectively taxing only real gains. Assets bought before May 10 will have their tax calculated proportionally — based on time held under each regime.
The tax hit in numbers
Portfolio manager Chris Joye estimated the effective capital gains tax rate would jump from about 23.5% to 46-47% under the proposed changes. That’s a doubling for many investors. High-income earners with assets that haven’t grown significantly beyond inflation could face an even larger relative hit, Joye noted.
Investor behavior could shift
Joye warned that the change might push money out of productive assets and into owner-occupied homes, which remain exempt from capital gains tax. That’s a concern given the government’s broader housing affordability goals. Scott Phillips of The Motley Fool took a more measured view, saying investors will likely pay more tax but still achieve strong returns — assuming the underlying investments perform.
What happens next
The budget is expected to be formally delivered in May 2027. Until then, the transition window means anyone buying crypto after May 10, 2026, will be subject to the new rules. That’s effectively immediate for new positions. The final legislative language will clarify how the inflation adjustment is calculated and whether any offsetting measures emerge. For now, the direction is clear: Australia is moving toward full taxation of crypto gains.
