Australia’s Proposed Tax Overhaul Could Increase Tax on Long-Term Crypto Holdings

Australia’s proposed tax overhaul represents a major shift in how investment gains, property income and digital assets are treated under the tax system. The key proposal is the replacement of the 50% capital gains tax discount with CPI-based indexation and the introduction of a 30% minimum tax on capital gains.

Under existing rules, Australian residents can reduce capital gains by half if assets are held for at least 12 months, with taxation events triggered by sale contracts, settlement or compensation events. This system has operated since 1999 and has strongly shaped investment behaviour across asset classes.

The proposed reforms would shift to inflation indexation, ensuring only real gains above CPI are taxed. This would reduce tax advantages associated with shorter holding periods compared with the current discount structure.

Negative gearing reforms will limit deductions for established residential properties acquired after 12 May 2026, with losses carried forward rather than offsetting other income immediately. New housing developments will retain full access to negative gearing incentives.

Related: Australia Eyes Crypto Tax Shake-Up as CGT Discount Changes Loom

New Reporting Rules 

The reforms extend to include crypto assets. A crypto-asset reporting framework aligned with OECD standards is planned, alongside a domestic transparency regime, although legislation has not yet been released. 

The Australian Taxation Office is expected to step up its focus on crypto compliance, particularly around classification and enforcement, which could result in higher taxes on long-term gains once the reforms take effect.

Treasury estimates suggest the changes could help 75,000 more Australians access home ownership over the next decade, while property price effects are expected to remain limited. The package is also supported by increased ATO funding and broader compliance expansion across fraud, R&D and corporate tax enforcement.

Overall, the reforms signal a tightening of tax settings across housing, investment and digital assets.

Related: NSW Police Pull Off One of Australia’s Largest Bitcoin Busts in History 

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