Australia will remove the 50% capital gains tax discount for holding cryptocurrencies long-term, with new rules to take effect from July 2027

BlockBeats news: On July 17, according to Forbes, Australia will make major changes to its Capital Gains Tax (CGT) system, affecting long-term investors, including those holding cryptocurrencies. The current 50% CGT discount for assets held for more than 12 months will be removed starting July 1, 2027.

The new system will replace the current discount mechanism with “cost-base indexation” and a minimum capital gains tax rate of 30%. Cost-base indexation allows investors to increase the original cost of assets based on inflation factors, reducing some of the book gains caused by inflation; meanwhile, the new rules set a minimum tax rate of 30% on capital gains.

Under the transitional arrangements, capital gains generated before July 1, 2027 will generally still be subject to the old regime, meaning investors can continue to enjoy the 50% discount. Gains generated after July 1, 2027 will be subject to the new tax regime, and long-term held crypto assets may need to have gains calculated separately for the two periods.

Australian crypto investors will need to prepare transaction records, cost bases, and the valuation of assets as of the 2027 transition date in advance, so as to accurately distinguish gains under the old and new tax regimes. At the same time, some long-term position holders may need to assess whether to sell assets before the new rules take effect in order to obtain the benefit under the current tax regime.