Australia’s Proposed CGT Rules May Weaken Long-Term Crypto Investing

Robin Singh, CEO and founder of Koinly, said the new changes could hit low-income crypto investors the hardest and may encourage an increase in short-term trading activity.

Australia’s proposed capital gains tax changes could reduce profits for cryptocurrency traders, particularly lower-income investors, and may discourage “patient investing,” according to several crypto industry executives.

The proposed reform, unveiled by Australia’s ruling Labor Party on Tuesday as part of its fiscal year 2027 budget, would introduce a minimum 30% tax on capital gains and eliminate the 50% capital gains tax discount for assets held longer than 12 months.

Robin Singh, CEO and founder of crypto tax platform Koinly, told Cointelegraph that the proposed changes present a mixed outcome. He said the new system “theoretically” shields investors from being taxed on purely inflation-driven gains, but added that, in practice, most crypto investors are likely to face higher taxes, with lower-income earners expected to be affected the most.

Many investors, particularly Gen Z and Millennials, have viewed crypto as a path toward wealth creation and long-term financial security. That perception could be affected by the proposed tax changes. A 2025 report from crypto exchange Independent Reserve found that 30% of respondents invested in crypto to diversify their portfolios, while 25% traded digital assets in hopes of becoming wealthy.

Crypto Trader Behavior Expected to Shift Under New Market Conditions

Jonathon Miller, the Australian general manager for crypto exchange Kraken, agreed that the proposed changes would make long-term crypto holding less appealing to investors.

“The bigger risk is that reducing the benefit of long-term holding makes patient investing less attractive, particularly in a market where assets can be traded around the clock. That could push some investors toward shorter-term behavior, which is not necessarily the best strategy for long-term wealth building,” Miller said.

“The sector will continue to mature, but policy settings can influence whether that maturity is built around long-term confidence or shorter-term activity.”

Andrea Yuen, the co-CEO of Australian crypto trading platform Swyftx, said she expects the tax changes to encourage crypto traders to move toward other avenues for long-term wealth creation.

“The change is likely to act as a catalyst for patient capital over the next few years. We expect a significant trend toward crypto allocations within retirement portfolios and self-managed super funds. Investors are essentially being incentivized toward structured, long-term wealth creation,” Yuen added.

Australian crypto exchange BTC Markets reported in its Investor Study Report that SMSF registrations increased by 69% year over year during the 2024–2025 financial year.

Proposed CGT Rules Still Require Parliamentary Approval

The Australian government has argued that the proposed changes would reduce investor demand for property purchases because, without tax incentives, real estate becomes less attractive as an investment, which could help free up housing supply.

The new measures would apply only to gains accumulated after July 1, 2027, while newly built homes are exempt from the changes. Critics have argued that the policy could instead drive housing prices higher, suppress investment activity, affect businesses, and place additional strain on new housing supply, according to The Australian in a report published Friday.

The tax reforms still need to pass through the Australian Parliament. Angus Taylor, leader of Australia’s Liberal Party, has reportedly pledged to oppose the measures and repeal them if his party forms government following the next federal election in 2028.

The Labor Party will also need to secure enough support for the tax reforms to pass through both chambers of Parliament, with 76 votes required in the House of Representatives and 39 votes needed in the Senate. Labor currently holds 94 seats in the House and 30 in the Senate.