Crypto is one of the easiest things to get wrong on a tax return, and one of the easiest for the ATO to check. Businesses that let Australians buy, sell and transfer crypto report customer and transaction data to the ATO, so a swap you forgot about may already be in its systems before you lodge.
This guide covers how crypto is taxed for the 2025-26 returns being lodged now and for the 2026-27 income year: when a CGT event happens, the personal use asset exemption, investing versus trading, staking income, records and data matching. Every rule here was checked against the ATO crypto CGT guidance and the ATO capital gains tax pages.
It is written for Australian residents who buy, hold, swap or earn crypto as individuals. If you want step-by-step calculations of gains, losses and cost base, read our crypto tax calculation guide alongside this one.
Key takeaways
- Crypto held as an investment is a CGT asset. Selling, swapping, gifting, converting to currency or spending it is a disposal.
- The personal use asset exemption only covers crypto acquired for less than $10,000 and kept or used mainly for personal use. Investment crypto does not qualify.
- Hold a coin for at least 12 months and individuals can generally apply the 50% CGT discount to the gain.
- Staking rewards are ordinary income at their market value when you receive them.
- Keep crypto records for 5 years from the later of when the record was made, the transaction finished or the CGT event year.
- The ATO expects to collect exchange data on about 700,000 to 1.2 million individuals and entities each year.
Crypto tax at a glance
| Activity | Usual tax treatment for an individual investor |
|---|---|
| Selling crypto for Australian dollars | CGT event |
| Swapping one coin for another | CGT event on the coin you gave up |
| Spending crypto or buying gift cards with it | CGT event (exempt only if a genuine personal use asset acquired for less than $10,000) |
| Gifting crypto | CGT event at market value |
| Moving coins between wallets you control | Not on the ATO list of disposals – keep the records |
| Staking rewards | Ordinary income at market value when received |
| Trading as a business | Trading stock and ordinary income, not capital gains |
Source: ATO – How to work out and report CGT on crypto, ATO – Crypto asset as a personal use asset, ATO – Staking rewards and airdrops, checked 9 October 2026.
How does the ATO treat crypto?
For most Australians, crypto is a CGT asset held on capital account, much like shares. The ATO says that if you hold crypto as an investment, it will not be exempt from CGT as a personal use asset.
Each crypto asset is a separate CGT asset, and every value must be converted to Australian dollars. Since 1 January 2020 the ATO has used Reserve Bank of Australia exchange rates. For currencies the RBA does not list, a reasonable externally sourced rate can be used.
In practice, you need the dollar value of every coin when you acquire it and when you dispose of it. Tax can arise even if you never cash out to a bank account.
What counts as a CGT event for crypto?
The ATO lists these disposals of crypto, each of which is a CGT event:
- selling a crypto asset
- gifting a crypto asset
- trading, exchanging or swapping one crypto asset for another
- converting a crypto asset to Australian or foreign currency
- using a crypto asset to buy goods or services
On a swap, your capital proceeds are the Australian dollar market value of the crypto you receive. If that cannot be worked out, you use the market value of the crypto you gave up.
The loss or destruction of an asset is also a CGT event. If you lose a private key and can prove you owned the coins, you may be able to claim a capital loss.
What about transfers between my own wallets?
Moving coins between wallets you own and control is not on the ATO list of disposals. The ATO does say a CGT event generally happens when you send a fungible crypto asset to an address you do not control, and that sending crypto to a smart contract, for example to wrap a token, is a CGT event. Its DeFi and wrapping guidance also treats many lending and liquidity pool arrangements as CGT events.
When is crypto a personal use asset?
A capital gain is exempt if the crypto is a personal use asset and you acquired it for less than $10,000. The ATO looks at the main use of the crypto at the time you dispose of it.
- Crypto held as an investment, in a profit-making scheme or in a business is not a personal use asset.
- The longer you hold crypto before using it, or the smaller the part you spend on personal items, the less likely it is to be a personal use asset.
- Buying gift cards, topping up a prepaid card, exchanging to dollars first, or paying through a payment gateway or bill payment intermediary generally means it is not a personal use asset.
- Losses on personal use assets are disregarded and cannot offset other gains.
The exemption suits someone who buys a small amount of crypto to make a specific purchase soon after. It rarely helps someone who has been holding coins for growth. The detail is on the ATO personal use asset page.
Am I investing or trading crypto as a business?
Most individuals are investors. Their gains are capital gains, their losses are capital losses, and the CGT discount can apply.
The ATO business guidance lists these indicators of a crypto business:
- the activity is carried on for commercial reasons and in a commercially viable way
- you intend to make a profit, or believe you will
- activities are planned and organised, for example with business records and a business plan
- similar activities are repeated regularly
The ATO also says the size of transactions, high volume or sophistication do not by themselves mean you are in business. If you are, crypto is trading stock: the cost of buying it is generally deductible and the proceeds are ordinary income. If you are not sure which side you fall on, our cryptocurrency accountants can review your activity.
How are staking rewards, airdrops and other crypto income taxed?
Staking rewards paid in extra tokens are ordinary income at their money value when you receive them. That value becomes the cost base of the new tokens.
Airdrops received for goods or services are ordinary income at market value. Other airdrops are generally only income if you carry on a crypto trading business, but each airdropped token is still a separate CGT asset. DeFi rewards are assessable at market value on receipt, much like interest.
| What you receive | Taxed when received? | Cost base of the new tokens |
|---|---|---|
| Staking rewards | Yes – ordinary income | Market value when received |
| Airdrop for goods or services | Yes – ordinary income | Market value on the day received |
| Other airdrop (no crypto business) | Generally no | Market value when received (often nil) |
| Coins from a chain split | No | Zero |
Source: ATO – Staking rewards and airdrops and ATO crypto chain splits guidance, checked 9 October 2026.
What changes to the CGT discount from 1 July 2027?
The ATO new legislation page confirms the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 is now law. From 1 July 2027, for individuals, trusts and partnerships, the 50% CGT discount is replaced with cost base indexation and a 30% minimum tax rate on capital gains.
The ATO says the changes apply only to gains that accrue after 1 July 2027. The 50% discount still applies to disposals in 2025-26 and 2026-27. If you hold crypto with large unrealised gains, get advice on timing rather than selling purely for tax reasons.
What records do I need and how does ATO data matching work?
The ATO record-keeping page asks you to keep, for each crypto asset: the date and purpose of each transaction, the other party (a wallet address is enough), exchange records, the dollar value at the time, accountant and software costs, and digital wallet records and keys.
Keep them for 5 years from the later of when you made the record, when the transaction finished or the year the CGT event happened. Export your history regularly and always before closing an exchange account.
Under the crypto data-matching protocol, the ATO collects data from designated service providers for every year from 2014-15 to 2025-26. It includes names, dates of birth, linked bank accounts, wallet addresses and transaction values. The ATO also exchanges financial account information with other countries under the Common Reporting Standard.
Individuals report crypto gains in the capital gains section of myTax. Our capital gains calculator gives a quick estimate, and if the ATO does query your return, our guide to ATO reviews explains what to expect.
Worked example: Sophie’s 2025-26 crypto gains
Sophie bought 2 ETH in August 2024 for $4,000 ($2,000 each). On 20 September 2025 she sold 1 ETH for $6,000. Capital gain: $6,000 – $2,000 = $4,000, held for more than 12 months.
In March 2026 she swapped a coin bought in December 2025 for $1,500 for another coin worth $1,000. Capital loss: $1,000 – $1,500 = -$500.
Losses come off before the discount: $4,000 – $500 = $3,500. Discount: $3,500 x 50% = $1,750 net capital gain.
Her other taxable income is $80,000, so the gain is taxed at 30% plus the 2% Medicare levy under the 2025-26 resident rates: $1,750 x 32% = $560 extra tax.
Rule of thumb: If coins left a wallet you control and something else came back, or nothing came back to a wallet you control, assume a CGT event happened and record the dollar value on that day.
Common mistakes with crypto tax
- Ignoring swaps. A crypto-to-crypto trade is a disposal even though no dollars changed hands.
- Stretching the personal use exemption. Crypto bought for growth does not become a personal use asset because you later spent some of it.
- Missing staking income. Rewards are income when received, not when you sell.
- Losing the cost base. If an exchange closes and you have no export, proving what you paid becomes very hard.
- Using capital losses against wages. A net capital loss cannot be deducted from your other income; it can only reduce capital gains.
If you hold investment property as well, our guide to CGT on property covers the main residence and other property rules.
FAQ about crypto tax in Australia
Do I pay tax if I never cashed out to Australian dollars?
Yes, in many cases. The ATO treats swapping one crypto asset for another, spending crypto and gifting crypto as disposals, so a CGT event can happen without any money reaching your bank account. For a swap, your capital proceeds are generally the Australian dollar market value of the crypto you received at the time of the trade.
Is moving crypto to my own hardware wallet taxable?
Moving coins between wallets you own and control is not on the ATO list of disposals, which covers selling, gifting, swapping, converting to currency and spending. Sending crypto to an address you do not control, or to a smart contract such as a wrapping protocol, generally is a CGT event. Keep records of every transfer so you can show the coins stayed yours.
Can I use the $10,000 personal use exemption for crypto I bought as an investment?
No. The exemption only applies to crypto you kept or used mainly for personal use and acquired for less than $10,000. The ATO says crypto held as an investment, in a profit-making scheme or in a business is not a personal use asset, even if you later spend some of it on personal items.
Are staking rewards taxed twice?
Not in the sense of the same amount being taxed twice. The market value of staking rewards is ordinary income when you receive them, and that value becomes the cost base of the new tokens. If you later sell those tokens, only the movement in value after you received them is a capital gain or loss.
How far back can the ATO see my crypto activity?
The ATO crypto data-matching protocol covers data from designated service providers for every financial year from 2014-15 to 2025-26, for roughly 700,000 to 1.2 million individuals and entities each year. If you left crypto out of an earlier return, a voluntary amendment before the ATO contacts you is generally the better position.
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Crypto records are often scattered across exchanges, wallets and old accounts. Nanak Accountants can reconcile your history, work out your gains, losses and income, and lodge your return correctly. Call 1300 626 258 or book a discovery meeting.
This article is general information only and is not personal tax or legal advice. Figures and rules were checked against the ATO crypto asset investments, crypto business, data-matching and new legislation pages on 9 October 2026. Rates and thresholds change, so confirm the current position before acting.
