Australia Weighs Scrapping 50% Crypto Capital Gains Tax Discount for Inflation-Indexed Model

Under current Australian Taxation Office (ATO) rules, individuals who sell crypto assets after holding them for more than 12 months receive a 50% discount on capital gains before the remainder is taxed at their marginal income tax rate. The system was designed to encourage long-term investment. Removing it would increase the tax burden on long-term holders of assets such as Bitcoin, with those subject to the top marginal rate of 45% particularly affected.

Australia’s government plans to scrap the 50% long-term capital gains tax discount for crypto assets in its fiscal 2027 budget, according to reports. It would instead adjust the acquisition cost for inflation and tax the full real gain after inflation. The effective date and calculation details remain subject to confirmation in the budget and parliamentary legislation, while actual tax liabilities would depend on purchase and sale prices, inflation and the taxpayer’s income bracket.