Australia's proposed capital gains tax reforms could triple the tax bill for low-income crypto investors, according to details of the plan. The changes would impose a 30% floor on CGT for crypto assets, a sharp departure from the current progressive rate that can be as low as zero for those on lower incomes.
How the 30% floor would work
Under current law, an Australian investor earning under $18,200 pays no capital gains tax. The proposed reforms scrap that exemption for crypto. Instead, anyone selling digital assets would owe at least 30% of their gain — regardless of total income. For a low-income earner making a modest $5,000 profit on a trade, the tax bill jumps from zero to $1,500. That's a tripling of effective tax for many.
The impact on holding strategies
The change doesn't just raise revenue — it reshapes how people think about holding. Long-term investors who buy and hold for years, hoping to sell in a lower tax bracket, now face a flat 30% floor. That eliminates the incentive to time sales around income fluctuations. Some may decide it's not worth holding crypto at all if the tax floor eats too deep into gains.
The proposed rules apply only to crypto, not to other asset classes like shares or property. That singling out has drawn criticism from investor advocates, who argue it penalises a specific technology rather than addressing broader tax fairness.
What happens next
The proposal is still in draft form. The government has not announced a formal timeline for legislation, but industry groups are already lobbying for changes — particularly a higher threshold before the 30% floor kicks in. The big question: whether the Treasury will carve out an exemption for small traders or keep the floor flat for every crypto sale. For now, anyone planning a crypto exit in Australia is staring at a much bigger tax bill than they expected.
