Australia’s government is pushing a major capital gains tax (CGT) reform that could sharply increase the tax load on crypto investors who hold assets for over a year. The proposal, part of the Labor Party’s 2027 fiscal budget, would scrap the current 50% CGT discount for long-term holdings and impose a minimum 30% rate on all net gains, with only inflation adjustments allowed as a deduction.
Under the existing rules, anyone holding crypto for more than 12 months can halve their taxable gain. For instance, a $10,000 profit would be reduced to $5,000 before applying the person’s marginal tax rate. The planned change would eliminate this discount completely, taxing the entire amount (minus inflation) at a flat 30% floor. Robin Singh, CEO of crypto tax platform Koinly, warned that for lower-income investors the effective tax bill could nearly triple, erasing the incentive to hold long term.
Industry voices fear the reform will reshape market behaviour. Jonathon Miller, Managing Director of Kraken Australia, said removing the long-term advantage would likely push more traders into short-term cycles, increasing volatility in a market that runs 24/7. He also cautioned that investors might resort to complex tax strategies or offshore platforms, making compliance harder for regulators.
The new system is set to take effect on July 1, 2027, pending parliamentary approval. Gains realized before that date would still qualify for the current 50% discount. Certain groups, including Age Pension recipients, would be exempt from the minimum 30% rate. The debate comes as Coinbase Australia recently launched support for self-managed super funds, tapping into a retirement savings pool that held around AU$1.06 trillion at the end of 2025.
