Australia will scrap the long-term 50% CGT discount: crypto recalculates real gains after inflation

The Australian government will release its 2027 fiscal year budget on May 13, which is expected to include a Capital Gains Tax (CGT) reform: abolishing the “50% discount for assets held for 1 year or more” mechanism for long-term investment assets (including cryptocurrencies), and replacing it with a real-gains tax model linked to inflation indices. Citing local media reports, Cointelegraph says the new rule will take effect officially on July 2027.

Cancel the 50% discount, switch to taxing “real gains after inflation”

The core of the current system is: when an Australian individual or entity holds assets such as stocks and cryptocurrencies for at least 12 months, the capital gains realized upon sale are only included in taxable income at 50%. This discount effectively halves the tax rate for long-term holders.

Under the new system proposed by the Anthony Albanese government, the 50% discount will be directly abolished, and an inflation-indexation model will be adopted. That is, going forward, the tax base will be “selling price minus purchase price, then subtract同期 inflation.” For long-term holders, when inflation is lower than the asset’s price growth, the tax base under the new rules would be higher than the tax base under the current 50% discount.

Transition period: May 10 as the cutoff, implemented in July 2027

The rollout schedule for the new rules includes two key cutoffs:

Assets purchased before May 10, 2026: some protection of the 50% discount under the old regime will remain.

Assets purchased after May 10, 2026: a 1-year transition period applies, after which the new rules will be fully applied.

July 2027: the new rules officially begin.

In effect, this design sets May 10, 2026 as the “last buying date” eligible for the old regime’s protection, and buyers within the following year will also have to switch to the new rules starting July 2027.

Specific impact on crypto investors

For readers in Taiwan or across Asia, the aspect that may be less familiar is that Australia has long treated cryptocurrency taxation under an “asset” logic rather than a “currency” logic—crypto trading is entirely brought into the CGT framework. As a result, canceling this 50% discount is essentially removing one of the biggest tax benefits for long-term BTC and ETH holders.

Media reports point out a potential side effect of the reform: because owner-occupied housing is granted full CGT exemption, the new rules could further push investment funds into the housing market, potentially worsening Australia’s housing affordability problems. In April, a finance and taxation scholar from the University of New South Wales commented that “adjusting the discount ratio slightly” is not enough and that the CGT framework should be comprehensively reset.

After the budget is released on May 13, three details can be watched: whether the discount is completely abolished (or kept at a lower rate such as 33% or 25%), whether the inflation index uses the CPI or another indicator, and whether the actual bill can pass smoothly in parliament. Australia is an important reference jurisdiction for crypto taxation under the English common-law system, and the outcome of this reform could influence related discussions in other jurisdictions later on.

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