Which crypto transactions trigger capital gains tax in Australia, how to work out the gain, and where the rules can catch you out.
Cryptocurrency feels like a world of its own, but for tax it sits inside the ordinary capital gains tax rules. There is no separate "crypto tax" in Australia. Instead, the Australian Taxation Office treats most crypto assets as CGT assets, which means a capital gain or loss is triggered every time you dispose of one. The catch is that "dispose" covers far more than just cashing out to your bank account. This guide walks through which transactions are CGT events, how to work out the gain or loss, and the handful of rules that trip people up most often. It draws on the ATO's crypto asset investments guidance.
Despite the name, cryptocurrency is not treated as money for Australian tax purposes. The ATO treats a crypto asset held by an investor as property, and specifically as a CGT asset. That single decision drives almost everything else: because it is a CGT asset, disposing of it is a CGT event, and any profit is a capital gain that gets added to your taxable income and taxed at your marginal rate. There is one important fork in the road. If you are simply investing, the CGT rules apply. If you are carrying on a business of trading, or you earn crypto through activities like a staking business, some of those proceeds can be ordinary income instead, taxed as you receive them. Most everyday holders fall on the investor side of the line.
A CGT event happens whenever you dispose of a crypto asset. The most common disposals are:
Simply buying crypto with Australian dollars is not a CGT event, and neither is moving crypto between two wallets that you own. Transferring your own coins from an exchange to a hardware wallet is not a disposal, although you should keep records to prove the wallets are both yours.
To calculate a capital gain, you subtract the cost base from the capital proceeds. The cost base is generally what you paid for the asset, plus incidental costs such as brokerage or exchange fees and transfer fees. The capital proceeds are what you received on disposal. Where you receive another crypto asset rather than cash, the proceeds are the market value of that asset in Australian dollars at the time of the transaction. Getting the timing and the dollar conversion right is the single most important record keeping habit for crypto investors, because exchange rates move constantly and the ATO expects an Australian dollar figure for each event. Our broader CGT cost base guide covers what does and does not count towards the cost base.
The same 50% CGT discount that applies to shares and property applies to crypto. If you are an Australian resident individual and you held the crypto asset for at least 12 months before the CGT event, you can reduce the resulting capital gain by half before it is added to your income. For example, a $6,000 gain on coins held for two years becomes a $3,000 taxable gain. The 12-month clock is strict and excludes both the day you acquired the asset and the day of the CGT event. Our 50% CGT discount guide explains the eligibility rules in full, including how trusts and super funds are treated.
Not every disposal is a gain. If you sell or swap crypto for less than your cost base, you make a capital loss. Capital losses cannot reduce your salary or other ordinary income, but they can offset capital gains from any source, including gains on shares or property. Importantly, you must apply capital losses before the 50% discount. If you have a $10,000 crypto gain on assets held over a year and a $4,000 loss elsewhere, the order is $10,000 minus $4,000, then halved, giving a $3,000 taxable gain. Unused capital losses carry forward indefinitely until you have a gain to use them against, which is the basis of tax loss harvesting.
There is a narrow exemption for crypto that is a genuine personal use asset. A crypto asset can be a personal use asset if you keep and use it mainly to buy items for personal use or consumption, rather than as an investment or to make a profit. Where that test is met, a capital gain is disregarded only if the asset cost $10,000 or less. The exemption is far narrower than many people assume. Crypto acquired and held as an investment, or used mainly to make a profit, is not a personal use asset, and the longer you hold a coin before spending it the less likely it is to qualify. It is also a one-way street: capital losses on personal use assets are always disregarded, so you cannot claim a loss on a coin you spent on personal items.
Rewards and free tokens have their own treatment. Staking rewards and similar returns are generally ordinary income at their Australian dollar value when you receive them, and that value then becomes the cost base for a later CGT event when you dispose of the reward tokens. New tokens from an airdrop are usually treated as ordinary income on receipt as well. A chain split, where a blockchain splits into two and you receive new coins, is treated differently again: the new coins are generally not income when received, and they take a cost base of nil, so the full proceeds become a capital gain when you eventually sell them. These areas are detailed and fact-specific, so check the ATO guidance for your exact situation.
| Transaction | CGT event? | Notes |
|---|---|---|
| Buying crypto with Australian dollars | No | Sets your cost base for later disposals |
| Selling crypto for Australian dollars | Yes | Gain is proceeds minus cost base |
| Swapping one crypto for another | Yes | Use the Australian dollar market value received |
| Spending crypto on goods or services | Yes | Unless it qualifies as a personal use asset |
| Gifting crypto to someone | Yes | Taken to receive market value on disposal |
| Moving crypto between your own wallets | No | Keep records proving common ownership |
Good records are not optional with crypto, because exchanges come and go and the volume of small transactions adds up fast. For every transaction, the ATO expects you to keep the date, the value in Australian dollars at the time, what the transaction was for and who the other party was, even if that is just a wallet address. Keep your receipts for purchases and disposals, records of exchange and transfer fees, and any software or agent costs related to managing your tax affairs. Records should generally be kept for at least five years after a CGT event. Many investors use crypto tax software that connects to their exchanges, but you remain responsible for the accuracy of what is reported. The ATO sets out the detail on its keeping crypto asset records page.
Disclaimer: This guide offers general information about how capital gains tax applies to cryptocurrency in Australia and is not financial or tax advice. Crypto tax outcomes depend heavily on your individual circumstances and the specific transactions involved. Always refer to the official ATO crypto asset investments guidance for the latest rules, and consult a qualified tax professional for advice tailored to your situation.