Australia Plans to Reduce Capital Gains Tax Discount, Potentially Affecting Long-Term Digital Asset Holders' Returns

Odaily Planet Daily News Australian authorities plan to amend the capital gains tax system in the upcoming federal budget, with the adjustment covering cryptocurrencies and other digital assets. Currently, the Australian Tax Office considers most cryptocurrencies as capital gains tax assets, allowing individual investors holding them for over 12 months to enjoy a 50% reduction in taxable gains.

According to reports, the government is currently considering reducing the 50% discount to between 25% and 33%, or adopting an inflation-indexed method to replace the fixed discount, meaning only the actual appreciation above inflation would be taxed. The reform applies to stocks, exchange-traded funds, and digital currencies held outside pension accounts. Analysis indicates that the new rules may reduce the after-tax returns of high-growth tokens and prompt retail investors to adjust their investment portfolios before the policy possibly takes effect on July 1, 2026. Specific details are still pending confirmation in the Treasurer's budget report.