Australia to End 50% CGT Discount for Real Gains Tax

The Australian government plans to replace the longstanding 50 percent capital gains tax discount on assets held for more than 12 months with an inflation-indexed model that taxes full real gains, according to details from budget preparations reported ahead of the fiscal year 2027 release. The change, affecting investors in cryptocurrencies, shares, commercial property and other assets, is set to take effect from July 2027.

Under the current system, investors reduce taxable capital gains by half after holding an asset for over a year. The proposed framework would instead adjust the asset's cost base for inflation over the full holding period and tax the remaining real gain at the investor's marginal rate. This shift could raise tax bills for long-term holders, particularly higher-income earners with modest inflation-adjusted returns or assets that appreciate sharply amid low inflation.

A transitional arrangement would apply. Assets purchased before May 10 would receive partial protection, with tax treatment calculated proportionally based on the time held under each regime. Those acquired after that date would have a one-year grace period before the new rules fully apply.