Australia to end 50% CGT discount, raising taxes on crypto

The Australian government will replace the 50% capital gains tax discount with an inflation‑indexed system, Treasurer Jim Chalmers is expected to announce on budget night.

The planned change would remove the current rule that halves the taxable portion of a nominal gain on assets held more than one year. Under the proposed system, taxable gains would be adjusted for inflation before tax is applied, rather than automatically receiving a 50% reduction.

The overhaul would cover a broad range of assets. Tax authorities indicate that cryptocurrencies fall within the scope of capital gains rules and would be affected by the new calculation method.

Officials are preparing a one-year grace period before the new rules take effect. Under the transition, assets acquired after the budget announcement would continue to receive the current 50% treatment until mid-2027.

After the budget is released, the proposals will proceed through the parliamentary process and require detailed rules to set how inflation indexing is calculated and applied.

Market participants reacted to the plan. Christopher Joye, chief investment officer of Coolabah Capital, wrote on X that the changes “could redirect capital away from productive investments.” He wrote further that the budget would “double the capital gains tax on productive businesses/assets from circa 23.5% to 46-47%,” and predicted investors would move funds into owner‑occupied housing as a tax‑free alternative.

The proposal follows recent legislation that requires digital asset trading platforms and tokenized custody services to obtain financial services licenses, increasing regulatory oversight of crypto businesses in Australia.

Treasurer Chalmers will present full details on budget night. The final measures and any regulatory guidance will be set out during the legislative process.