Australia to propose capital gains tax changes affecting crypto investors: reports

The Australian government is expected to reveal details of the proposed changes to capital gains tax (CGT) discounts on Tuesday, which would likely affect crypto investors, according to local media.

The Australian Financial Review reported Sunday that the government is set to offer a one-year grace period before the planned CGT changes take effect. Treasurer Jim Chalmers is scheduled to disclose details of the proposal on Tuesday's budget night.

Under the reported plan, the government intends to replace the 50% CGT discount on assets held for more than one year with an inflation-indexed model, effectively increasing taxes on some long-term gains. The assets would include cryptocurrencies, according to a report from The Sydney Morning Herald.

Assets acquired after the budget night would still qualify for the existing 50% discount until mid-2027 under the proposed transition period, per the report.

The planned measures have drawn criticism from market participants. Christopher Joye, chief investment officer of Coolabah Capital, wrote on X that the tax changes could redirect capital away from productive investments.

"After the budget doubles the capital gains tax on productive businesses/assets from circa 23.5% to 46-47%, investors will understandably pull money from businesses, shares, commercial property, and rental housing and plough it into their tax-free owner-occupied home," said Joye.

The planned tax changes come as Australia continues advancing its broader crypto regulation. Last month, the country passed new legislation requiring "digital asset platforms" and "tokenized custody platforms" to obtain financial services licenses.