Capital Gains Tax Australia 2025–26: CGT Reforms, Crypto, and How a Tax Agent Can Help

Capital gains tax is one of the most complex and consequential areas of Australian tax law — and 2026 is a pivotal year for investors, property owners, and cryptocurrency holders alike. With the Australian Government legislating major CGT reforms set to take effect from 1 July 2027, and the ATO intensifying its data-matching programs across share trading and crypto exchanges, understanding your CGT obligations for the 2025–26 financial year has never been more important. A registered tax agent can help you navigate these changes, optimise your position before the transition, and ensure full compliance with ATO requirements.

Understanding Capital Gains Tax in Australia

Capital Gains Tax (CGT) is not a separate tax in Australia — it is part of your income tax. When you dispose of a CGT asset, any capital gain is included in your assessable income and taxed at your marginal rate. A disposal includes selling an asset, gifting it, swapping it for another asset, or ceasing to own it in certain other ways.

CGT assets include shares, managed fund units, investment properties, cryptocurrency, and most other investments. Your main residence is generally exempt from CGT, as are personal use assets acquired for less than $10,000 and used solely for personal consumption.

The capital gain is calculated as the difference between your cost base — the original purchase price plus associated costs such as brokerage, stamp duty, and improvement costs — and the capital proceeds received on disposal. If the proceeds are less than the cost base, you have a capital loss, which can be used to offset capital gains in the same or future years.

The 50% CGT Discount: What Still Applies in 2025–26

For the 2025–26 financial year, the existing CGT discount rules remain in force. Individual taxpayers, trusts, and partnerships who have held a CGT asset for at least 12 months before disposal are eligible for a 50% CGT discount on any net capital gain. This means only half of the gain is included in assessable income.

Superannuation funds — including self-managed superannuation funds (SMSFs) — are eligible for a one-third discount on assets held for 12 months or more. Companies are not eligible for the CGT discount at all.

The 50% discount is one of the most valuable concessions in the Australian tax system, and it remains fully available for assets disposed of before 1 July 2027. This makes the 2025–26 and 2026–27 financial years particularly important for investors considering whether to realise gains before the new regime takes effect.

The 2027 CGT Reforms: What Is Changing and Why It Matters Now

The Australian Government has legislated significant changes to the CGT discount framework, effective from 1 July 2027. These reforms will affect how capital gains are calculated and taxed for assets disposed of after that date.

Replacement of the 50% Discount with Indexation

From 1 July 2027, the 50% CGT discount will be replaced by a cost-base indexation method. Under this approach, the cost base of an asset is adjusted for inflation using the Consumer Price Index (CPI), so that only the "real" gain — the portion exceeding inflation — is subject to tax. This is intended to be fairer over long holding periods but will generally result in a higher taxable gain than the current 50% discount for assets held in high-growth environments.

Minimum 30% Tax Rate on Capital Gains

A minimum effective tax rate of 30% will apply to real capital gains from 1 July 2027. This measure targets high-income investors who previously deferred asset sales to low-income years — such as retirement — to pay CGT at a reduced marginal rate. Under the new rules, even if your marginal rate is lower than 30%, your capital gains will be taxed at a minimum of 30%.

Transitional Arrangements for Assets Held Across the Transition Date

For assets acquired before 1 July 2027 and sold after that date, transitional rules apply. Gains accrued up to 1 July 2027 will remain eligible for the 50% CGT discount, while gains accruing after that date will be subject to the new indexation rules. To determine the value at 1 July 2027, taxpayers may obtain a formal market valuation or use an ATO-approved apportionment formula.

This transitional complexity makes professional tax advice essential for investors holding long-term assets such as shares, investment properties, or business assets that span the transition date.

Cryptocurrency and CGT: ATO Data-Matching in 2026

The ATO treats cryptocurrency as a CGT asset, not as currency. Every disposal of cryptocurrency — including selling for Australian dollars, swapping one coin for another, using crypto to purchase goods or services, and gifting crypto — triggers a CGT event that must be reported in your tax return.

The ATO operates an extensive data-matching program with Australian digital currency exchanges, collecting transaction data and comparing it against individual tax returns. Discrepancies between exchange-reported data and lodged returns are flagged for review or audit. The ATO has made clear that cryptocurrency is a compliance priority.

Income Tax Treatment of Crypto Earnings

Not all cryptocurrency receipts are subject to CGT. Staking rewards, mining income, airdrops, and DeFi yield farming returns are generally treated as ordinary income at the time of receipt, taxed at your marginal rate. These amounts must be reported separately from capital gains and are not eligible for the CGT discount.

Record-Keeping Requirements

The ATO requires cryptocurrency investors to maintain detailed records for at least five years. Required records include transaction dates, the type and quantity of cryptocurrency, the AUD value at the time of each transaction, the purpose of the transaction, and wallet addresses. Many investors use specialist crypto tax software to reconcile transactions across multiple wallets and exchanges, but a registered tax agent can review and validate these calculations before lodgement.

Australian Regulatory Context: ATO, TPB, and Your Tax Agent

Registered tax agents in Australia are regulated by the Tax Practitioners Board (TPB), an independent statutory body established under the Tax Agent Services Act 2009. Only registered tax agents are legally permitted to prepare and lodge tax returns on behalf of clients for a fee.

The TPB maintains a public register of registered tax agents at tpb.gov.au, where you can verify that any agent you engage holds current registration. Registered agents must meet ongoing education requirements, hold professional indemnity insurance, and comply with the Code of Professional Conduct.

The ATO administers CGT through the income tax system and publishes detailed guidance on its website, including specific guidance on cryptocurrency, shares, property, and small business CGT concessions. The ATO's data-matching capabilities extend across share registries, property transactions, and digital currency exchanges, making accurate and complete reporting essential.

Common CGT Mistakes to Avoid

CGT errors are among the most common issues identified in ATO audits. Understanding the most frequent mistakes can help you avoid costly penalties and interest charges.

• Failing to report crypto-to-crypto swaps — Many investors incorrectly assume that swapping one cryptocurrency for another is not a taxable event. It is a disposal and must be reported.
• Incorrect cost base calculation — Forgetting to include brokerage fees, stamp duty, or improvement costs in the cost base results in an overstated gain and excess tax paid.
• Missing the 12-month holding period — Disposing of an asset just before the 12-month mark forfeits the 50% CGT discount. Timing disposals carefully can make a significant difference.
• Not carrying forward capital losses — Capital losses can be carried forward indefinitely to offset future gains. Failing to track and apply prior-year losses means paying more tax than necessary.
• Ignoring the main residence exemption conditions — The main residence exemption has specific conditions, particularly for properties that have been rented out or used for business purposes. Partial exemptions apply in these cases.
• Not planning for the 2027 transition — Investors holding long-term assets should model the impact of the new CGT regime before 1 July 2027 to determine whether realising gains under the current rules is advantageous.

Questions to Ask Your Tax Agent About CGT

A registered tax agent with expertise in capital gains tax can provide significant value — but asking the right questions ensures you get the most from the engagement.

• What is my total CGT liability for the 2025–26 financial year? — A comprehensive review of all disposals, including shares, property, and crypto, is essential.
• Am I eligible for the 50% CGT discount on any of my disposals? — Confirm the 12-month holding period has been met for each asset.
• Do I have any prior-year capital losses I can apply? — Unused losses from previous years can reduce your current-year liability.
• How will the 2027 CGT reforms affect my investment portfolio? — Your agent should be able to model the impact of the new rules on your specific holdings.
• Are my cryptocurrency records complete and accurate? — A tax agent can review your crypto transaction history and identify any gaps before lodgement.
• Are there any small business CGT concessions I may be eligible for? — The four small business CGT concessions can significantly reduce or eliminate CGT on the sale of business assets.

How MyMoney® Can Help

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