Hold 12 months or trade often?
The 50% CGT discount is one of the biggest tax advantages for crypto investors in Australia — until it is abolished for disposals from 1 July 2027. But is holding always better than trading? Here's how to decide.
This comparison has an expiry date
Everything below describes disposals made before 1 July 2027. The general 50% CGT discount is abolished for CGT events from that date: the cost base is indexed for inflation instead, and the real gain is taxed at a 30% minimum rate. For a disposal on or after 1 July 2027 the choice on this page changes shape — holding past 12 months no longer halves the gain, so the case for holding rests on inflation indexation and on your own marginal rate rather than on the discount.
| Hold 12+ months | Trade frequently | |
|---|---|---|
| CGT discount | 50% discount (sold before 1 July 2027) | No discount |
| Effective tax rate | ~18.5% (at 37% marginal) | ~37% (at 37% marginal) |
| Record keeping | Simple (fewer transactions) | Complex (every trade) |
| Strategy | Long-term investing | Active trading/speculation |
| Risk profile | Ride out volatility | Capture short-term moves |
When you hold a CGT asset (including cryptocurrency) for at least 12 months and dispose of it before 1 July 2027, you're eligible for the 50% CGT discount. This means only half of your capital gain is added to your taxable income. From 1 July 2027 that halving no longer happens — see the note above.
Sold before 12 months
$10,000 gain at 37% rate:
Sold after 12 months
$10,000 gain at 37% rate:
Every crypto-to-crypto trade is a taxable event. If you make 100 trades a year, you need to calculate the cost base and capital gain/loss for each one. This includes:
The ATO has data-matching programs with crypto exchanges. They know about your trades, so accurate records are essential.
Capital losses can offset capital gains. If you've made losses on some crypto trades, you can use them to reduce gains on others. Key points:
How does the 12-month CGT discount work for crypto?
If you hold cryptocurrency for at least 12 months and sell before 1 July 2027, you receive a 50% CGT discount. This means only half of your capital gain is added to your taxable income. For example, a $10,000 gain becomes $5,000 for tax purposes.
For disposals from 1 July 2027 the discount is abolished. The gain is worked out by indexing the cost base for inflation, and the real gain is taxed at a 30% minimum rate, regardless of how long you held the coin.
What if I trade between different cryptocurrencies?
Trading one crypto for another (e.g., Bitcoin to Ethereum) is a taxable event. You're treated as having sold the first crypto at market value, potentially triggering a capital gain or loss. The 12-month clock resets for the new crypto you acquire.
Are NFTs taxed the same way as cryptocurrency?
Yes, NFTs are treated as CGT assets by the ATO. The same rules apply: selling for a profit triggers capital gains tax, and the 50% discount is available if you hold for 12+ months and sell before 1 July 2027 — from that date the discount is gone and the indexed real gain is taxed at a 30% minimum instead. Creating and selling NFTs may be treated as business income.
How do I track cost base for cryptocurrency?
You need to record the date acquired, purchase price in AUD, transaction fees, and date sold. Many people use crypto tax software that syncs with exchanges. Without records, the ATO may assume zero cost base, meaning your entire sale is taxable.
Tax Accuracy & Sources
Compares Australian CGT treatment of long-term crypto holding (12+ months, eligible for the 50% discount on disposals before 1 July 2027) versus frequent trading. Examples use a 37% marginal rate; your actual saving depends on your income, losses, and disposal sequence.