What Is the CGT Discount for Cryptocurrency?

The Australian Tax Office (ATO) treats cryptocurrency as a CGT asset, not as foreign currency or a financial product. This means every time you dispose of crypto — by selling it for AUD, swapping it for another coin, or using it to buy goods or services — you may trigger a capital gains tax event.

The 50% CGT discount, formally known as the capital gains tax discount, allows eligible Australian resident individuals to reduce their capital gain by 50% before adding it to their taxable income. This is a significant tax benefit that can substantially lower your tax bill on profitable crypto trades.

For example, if you bought 1 ETH for $2,000 and sold it 18 months later for $5,000, your capital gain is $3,000. With the 50% discount, only $1,500 is added to your taxable income — saving you hundreds or even thousands in tax depending on your marginal rate.

Eligibility Requirements for the Crypto CGT Discount

To qualify for the 50% CGT discount on your cryptocurrency gains, you must meet all of the following conditions:

• Australian resident for tax purposes at the time of the CGT event
• Individual taxpayer — companies cannot claim the discount, though super funds get a one-third (33.3%) discount
• Held for more than 12 months — the acquisition date to disposal date must exceed 366 days
• The crypto must have been acquired on or after 20 September 1985 (pre-CGT assets are exempt, but crypto obviously qualifies)

If you acquired the same cryptocurrency in multiple purchases, the ATO applies the first-in-first-out (FIFO) method by default, though you can choose specific identification or weighted average if you keep proper records.

When Does the CGT Discount Not Apply to Crypto?

There are several situations where you cannot claim the 50% CGT discount on your cryptocurrency gains. The most common is when you hold the crypto for 12 months or less — short-term trades, day trading, and swing trading under one year all miss out on the discount entirely.

If the ATO classifies your crypto activity as a business (e.g., you run a crypto exchange, mine professionally, or trade with the intention of earning assessable income like a business), your crypto profits may be treated as ordinary income rather than capital gains. Ordinary income does not qualify for the CGT discount at all.

Gains made through margin trading, futures, or derivatives may also fall outside the CGT discount rules depending on the specific financial arrangement. Additionally, if you acquired crypto as salary or payment for services, that's assessable as ordinary income at the time of receipt — the CGT discount only applies to the subsequent disposal of that crypto, not the original acquisition.

How to Calculate Crypto Capital Gains After the Discount

Calculating your crypto CGT with the discount involves a straightforward three-step process. First, determine your capital gain by subtracting the cost base (what you paid, including fees) from the capital proceeds (what you received when selling or swapping).

If you held the asset for more than 12 months, apply the 50% discount: multiply the gain by 0.5. This discounted gain is then added to your other assessable income for the financial year and taxed at your marginal rate.

FY 2025-26 Tax Rates for Crypto Gains

Once you apply the 50% CGT discount (where eligible), the remaining gain is treated as part of your assessable income and taxed at the FY 2025-26 marginal tax rates. The Stage 3 tax cuts are fully in effect, meaning the 16% bracket applies up to $45,000 and the 30% bracket applies up to $135,000.

If your discounted crypto gain pushes you into a higher tax bracket — for instance, from 30% into 37% — you'll pay the higher rate only on the portion of income within that bracket. The Medicare levy of 2% also applies to your total taxable income including the discounted gain.

Record Keeping for Crypto CGT Purposes

The ATO has sophisticated data-matching capabilities with Australian cryptocurrency exchanges. They can see your transaction history, so accurate record-keeping is essential. For each crypto transaction, you need to record the date and time of acquisition and disposal, the market value in AUD at each point, what you paid (cost base including fees), what you received (capital proceeds), and the purpose of the transaction.

If you use multiple exchanges or wallets, maintain a single consolidated ledger using crypto tax software (such as Koinly, CryptoTaxCalculator, or Syla). These tools can apply the FIFO method automatically and calculate your 50% CGT discount eligibility based on the holding period of each parcel.

The ATO recommends keeping your records for five years after the date of the CGT event. For crypto held long-term, keep records for five years after you dispose of it. Poor record-keeping is the most common reason crypto investors overpay tax or get audited.

Frequently Asked Questions

Does the 50% CGT discount apply to crypto-to-crypto trades?

Yes. When you swap one cryptocurrency for another (e.g., BTC to ETH), the ATO treats this as a disposal of the first asset and acquisition of the second. If you held the first crypto for more than 12 months before the swap, you can claim the 50% CGT discount on any capital gain from that disposal.

Can I claim the CGT discount on staking rewards?

Not directly. Staking rewards are typically treated as ordinary income at their market value when you receive them. However, if you hold those staked rewards for more than 12 months and then sell them, the growth in value from the reward date to the sale date may qualify for the 50% CGT discount.

Does the CGT discount apply if I use crypto to buy goods or services?

Yes. Using crypto to buy a coffee, a car, or anything else is a CGT event. If you held the crypto for more than 12 months, the 50% discount applies to any capital gain. Personal use transactions under $10,000 may be exempt from CGT entirely under the personal use asset exemption.

What happens if I have both gains and losses in the same year?

You must first offset your capital losses against your capital gains before applying the 50% discount. This means you can't apply the discount to gross gains while ignoring losses — net the losses first, then apply the discount to any remaining gain. Unused losses can be carried forward to future years.

Do foreign residents ever qualify for the crypto CGT discount?

Generally no. Since 8 May 2012, foreign residents for tax purposes cannot claim the CGT discount on most assets, including cryptocurrency. If you move overseas while holding crypto, special rules apply to the timing of the CGT event and your discount eligibility.

Use our take-home pay calculator to see how your crypto gains affect your overall income tax, or check the FY 2025-26 income tax rates page for the latest tax brackets.