Crypto Gains Under Threat As Australia Weighs Tax Reform

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Crypto Gains Under Threat As Australia Weighs Tax Reform

Okay, so I’ve been looking into these new crypto tax rules, and it’s a bit complicated. Luckily, there’s a one-year window to adjust, which is good news. But time is definitely of the essence! Anything I bought *after* May 10th will be fully under the new rules. For stuff I bought *before* that date, the tax I owe will be calculated based on how long I held it under the old versus the new system – so it’s a bit of a mix. I need to get my records sorted quickly!

What Is Actually Changing

In Australia, if you hold an investment – like cryptocurrency – for over a year, you only pay tax on 50% of the profit you make when you sell it. This is known as a capital gains tax discount.

As a researcher following the upcoming budget, it looks like the Albanese government plans to remove the current discount on capital gains tax in the 2027 fiscal year budget, which is due to be released on Tuesday. Instead of the discount, they’re proposing a new system where the full profit from selling an asset would be taxed, but that profit would be adjusted to account for inflation over the time you owned it. If passed, these changes would come into effect in July 2027.

According to the Australian Financial Review, upcoming budget plans will impact a wide range of people, including those who own cryptocurrency, stocks, property, and businesses.

AUSTRALIA COULD SCRAP 50% CRYPTO TAX DISCOUNT IN BIGGEST CAPITAL GAINS OVERHAUL IN YEARS

Australia’s government will announce its budget on Tuesday, and it’s expected to remove a tax break for crypto investors. Currently, Australians who hold cryptocurrency for longer periods can reduce their capital gains tax by 50%, but that discount is likely to be eliminated.

— BSCN (@BSCNews) May 11, 2026

Winners And Losers

Okay, so I’ve been reading about these new tax rules, and honestly, it doesn’t have me panicking. Scott Phillips from The Motley Fool seems to think we’ll probably end up paying more in taxes, but our investments should *still* do well – meaning we’ll likely still see good returns even after taxes are taken out. That’s a relief!

It’s true that changes to capital gains tax could affect founders and investors, but the argument assumes they’ll be making significant profits to begin with. The speaker believes that potential for high returns is already a strong enough motivation for them.

However, some experts are concerned. Chris Joye, a portfolio manager at Coolabah Capital Investments, believes the planned changes could actually double the taxes on investments like stocks, business properties, and homes rented out.

The biggest benefit of the new budget is for homeowners, as people are likely to invest in property. However, with capital gains taxes on businesses and other investments nearly doubling – from around 23.5% to 46-47% – investors will likely move their money out of those areas…

— christopher joye (@cjoye) May 11, 2026

He estimates the actual interest rate will be about 46% to 47%, a significant increase from the current rate of around 23.5%. He worries this change could lead investors to shift their money from businesses and other investments into personal homes, as profits from home sales aren’t taxed like other investments.

According to Joye, the biggest benefit of the new budget is for homeowners, as people are likely to invest in owner-occupied homes because they are tax-free.

What It Means For Crypto Holders

People who hold cryptocurrency for over a year get a tax break: their profits are taxed at a lower rate. But current rules could change that, potentially impacting long-term crypto investors.

The new plan would tax the total profit from an investment, after accounting for inflation. For wealthier individuals whose investments haven’t significantly outpaced inflation, this could result in a much higher tax bill than they currently pay.

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2026-05-12 13:59