Australia CGT overhaul may curb crypto long-term holding

The ruling Labor Party has proposed a capital gains tax overhaul that would introduce a 30% minimum tax on capital gains and remove the 50% discount for assets held longer than 12 months. The changes would apply to gains accrued after July 1, 2027. The package also includes an inflation adjustment intended to exclude purely inflationary gains, and new homes are exempt. The measures must pass both houses of Parliament before taking effect.

Crypto industry executives and tax advisers say the plan would reduce the tax advantage for long-term holding and raise tax bills for many investors. Robin Singh, chief executive of crypto tax platform Koinly, called the proposal “a mixed bag,” noting the inflation adjustment “theoretically” protects against being taxed on inflation, but adding that most crypto holders will face higher taxes in practice. He provided an example in which a lower-income investor who would have paid about $3,800 under the current 50% discount on a $20,000 gain could face roughly $10,200 under the new rules.

Executives expect the change to influence trading behavior. Jonathon Miller, Kraken’s general manager in Australia, warned that reducing the reward for long-term holding could make patient investing less attractive in a market that operates around the clock. He said that could push some investors toward shorter-term trading, altering typical holding patterns.

Some platform leaders expect a shift toward structured retirement saving. Andrea Yuen, co-CEO of Swyftx, said the proposal is likely to encourage more crypto allocations within retirement portfolios and self-managed super funds. Data from an Australian exchange shows self-managed super fund registrations rose 69% year-on-year in the 2024–2025 financial year, a figure industry participants cite as evidence of growing interest in tax-preferred retirement vehicles.

A 2025 exchange report found that about 30% of crypto investors cited portfolio diversification as a motivation, while 25% said they were trading to achieve large gains. Several industry figures noted the inflation adjustment will not offset the loss of the 50% discount for many assets that historically outpaced inflation, a factor they expect could lead to more frequent trading by retail and mid-sized holders.

The government frames the reform as a tool to reduce incentives for property investment and free up housing supply. Opponents argue the changes could reduce investment and have unintended effects on housing prices and business investment. The opposition leader has pledged to oppose the legislation and repeal it if elected in 2028. For the reforms to pass, Labor needs 76 votes in the House and 39 in the Senate; the party currently holds 94 House seats and 30 Senate seats. Tax professionals say advisers and investors will adjust strategies over time, but that the transition could be disruptive for people who relied on the 50% discount. The rules would not affect gains realized before July 1, 2027.