Perhaps, like me, when you first started trading crypto, you didn’t spend much time thinking about how Capital Gains Tax (CGT) would be an issue. I was more focused on finding the next moonshot than reading the ATO website.
But after a few years of buying, selling, and swapping coins—some wins, some losses—I finally sat down to learn how the 50% CGT discount works in Australia.
And I can tell you something: if you are holding your crypto long enough, you know this discount can save you bucks at tax time.
So let me break it down for in simple terms – no jargon, no legalese (no confusing, lawyer speak). Just straight-up facts and a bit of personal experience.
What Is the 50% Capital Gains Tax Discount?
So first of all, please bear with us as we look at some fundamental features of this market.
In Australia, assuming you keep an asset (such as crypto) within your portfolio and hang onto it beyond a year, you can get a 50% discount on what you pay as tax on the capital gain that you have made.
That means:
When you do sell your crypto with a profit, and you did it more than a year ago, then you are not paying all the tax on this profit but only half of it.
Speedy Example:
- You purchased Bitcoin at the cost of 5,000 dollars
- You can sale it 15 months later at 9,000 dollars
- Your profit = $4,000
- With the CGT discount, you’re only taxed on $2,000
Not bad, right?
12 Months Rule (And Why It Matters)
To get the 50 percent discount, you need to prove that you have kept the crypto within a minimum of 12 months before you can add it to the disposal commercial clothes.
“Dispose” means:
- Selling for fiat (like AUD)
- Swapping for another crypto (yes, that counts!)
- Spending it
- Gifting it
The 12-month clock starts from the date of purchase (or acquisition), and ends on the date of disposal.
Hold it for 11 months and 29 days? Sorry—no discount.
My Personal Experience: Why I Started Holding Long-Term
When I first got into crypto, I used to jump in and out of coins every few weeks. I was chasing pumps, flipping altcoins, and racking up short-term capital gains like crazy.
But when I sat down with an accountant last year, he showed me how much tax I could’ve saved if I had just held for a bit longer.
One example:
I sold $10K worth of ETH after a 6-month hold. My gain was around $4,000.
That full $4K got taxed as capital gains. Ouch.
If I’d just waited another 6 months?
I would’ve only paid tax on $2,000, thanks to the CGT discount.
Lesson learned.
Now I’ve got a dedicated long-term HODL wallet, and everything in there is off-limits until I hit that 12-month mark.
Who Can Claim the Discount?
The 50% CGT discount is only available to individuals and trusts.
If you’re a company, sorry—no CGT discount for you.
Also:
- You must be a resident for tax purposes in Australia
- Your crypto must be treated as a capital asset, not as trading stock (i.e. you’re an investor, not running a crypto business)
If you’re day trading full-time or treating crypto as business income, this discount likely doesn’t apply to you.
Does Swapping One Crypto for Another Reset the 12 Months?
Yes. And this trips up a lot of people.
Let’s say:
- You buy ADA in January 2024
- You swap ADA for SOL in October 2024
Boom. You’ve disposed of the ADA, triggering a capital gains event—even though you didn’t cash out to fiat.
And your new asset (SOL) starts a fresh 12-month holding period from the date of that swap.
So yeah, every trade matters when it comes to CGT.
What If You Made a Loss?
If you sell crypto at a loss, there’s no discount—because there’s no gain.
But! You can carry forward your capital losses and use them to reduce future capital gains.
For example:
- You lost $2,000 on SHIB in 2023
- You made $6,000 on BTC in 2025
Your net gain is $4,000, and then you might get the 50% discount on that (if you held BTC for more than a year)
How I Track My Holding Periods
Look, I’m not a spreadsheet wizard. So I use Koinly to automatically track:
- Dates I bought each token
- Whether each trade qualifies for the CGT discount
- The amount of tax that I will pay (with and without discount)
You can use other tools such as CryptoTaxCalculator, CoinTracker or even Excel which is fine, as long as you have the dates you purchased and/or sold cal distinguished.
Tip: Always download your transaction history from exchanges. ATO can ask for up to 5 years of records.
Real Case Study: My Friend Josh’s Tax Saving
Josh bought 1 ETH for $2,800 in May 2022. He didn’t touch it until June 2023, when he sold it for $4,800.
- Gain = $2,000
- Since he held for 13 months, he qualified for the 50% CGT discount
- He was only taxed on $1,000, not $2,000
That saved him about $325 in tax (he’s in the 32.5% tax bracket). Multiply that across multiple coins, and it adds up fast.
Other Article: Do You Really Need to Pay Tax on Crypto Airdrops in Australia
Common Mistakes People Make
1. Forgetting Swap = Disposal
Swapping BTC for ETH? That’s a taxable event.
2. Not Tracking Dates
ATO cares about exact dates. Not “roughly one year.”
3. Thinking the Discount Applies to Every Trade
It only applies if you hold that specific crypto for over 12 months.
4. Ignoring Stablecoins
Yes—swapping into USDT or USDC still triggers CGT!
FAQs (Answers)
1. What is the crypto in Australia 50% CGT discount?
Australian individuals are lucky because the 50% CGT (Capital Gains Tax) discount allows reducing the taxable crypto profit by half, given that they owned an asset within at least 12 months prior to selling, swapping, or giving it away.
2. Do I have to keep my crypto specifically 12 months so as to enjoy the discount?
Yes. The length of time you have to hold the asset is comparatively longer i.e., 12 months. Just a single day down and you will not be entitled to the 50 percent fee reduction.
3. Do the companies or businesses get 50 percent crypto tax break?
No. The individual taxpayers and trusts are the only ones who can enjoy the 50% CGT discount. Individual companies are not qualified.
4. Will I be able to receive the 50% discount when I sell at any loss?
No. That discount is applyable only to capital gains but not losses. You can however carry forward yourcryptolosses so as to reduce future gains.
5. Does the 50 per cent CGT discount happen automatically in Australia?
No. When it lodges its taxation return, it or your tax agent has to manually compute and implement it. This will mostly be done by most crypto tax programs.
7. What about tax when I transferred my crypto to a new wallet?
No. Movements within the wallets that you own do not incur a tax liability. Neither does it reset a holding period.
Final Thoughts (And My Strategy Going Forward)
I’ll be honest—I still take short-term profits sometimes. But now I’m way more intentional about it.
Here’s my strategy:
- Short-term trades go in one wallet (I accept full CGT)
- Long-term HODL positions stay untouched for 12+ months (hello, 50% discount)
- I track everything monthly using Koinly
- I set a calendar reminder 1 year after every buy—so I know when I’m eligible
Crypto is unpredictable, but taxes don’t have to be.
If you’re in Australia, make the 50% CGT discount work for you, not against you. A little planning now can save you thousands later.