Taxing Bitcoin and Stocks on Unrealized Gains

Australia is nearly ready to pass a tax on unrealized capital gains. If the proposal is approved, scheduled for July 1, it will apply to individuals with investments exceeding AUD 3 million ($2 million). Stocks as well as digital assets such as Bitcoin will be taxed during the 2025-2026 period as part of this plan.

Analyst Fred Krueger emphasized that this represents a significant shift in Australia’s approach to capital gains taxation. Earlier administrations had discussed these ideas, but they never became law, so this is a landmark change in Australian taxation.

Related: Australia’s ASIC Initiates Civil Penalty Proceedings Against ACX Ex-Director Liang Guo

Australia’s New Tax to Impact BTC and Traditional Asset Gains

Gains made on Bitcoin from 2025 through 2026 will be subject to taxation for holders. Capital gains taxes will be charged at 15% for gains that have not yet been realized. If Bitcoin’s value increases over this period, the holder would need to pay the government 15% of that gain. For now, the government has not stated whether or not tax losses can be used against future tax payments.

Besides Bitcoin, this tax would also be applicable to traditional assets, such as stocks. Shareholders in companies like Strategy (MSTR) would be required to pay taxes according to the same guidelines. High-net-worth individuals and asset managers are now concerned about how this may harm the stability of their investments.

Industry Leaders Slam Tax on Unrealized Gains

Leaders in the industry strongly oppose the tax. Tom Lee, Chief Investment Officer at Fundstrat Capital, said the suggestion was “an insanely bad idea.” He stated that taxing gains that investors have not yet realized could restrict investment and hinder market growth. His comments reveal a common sentiment among investors that the tax may influence their decisions, particularly in highly volatile markets.

David JoelKatz Schwartz, Ripple’s Chief Technology Officer, gave a more detailed perspective. He said that the outcome of the tax would rely on the kind of arrangements made in the new tax policy. Schwartz noted that taxpayers can use their appreciated assets as collateral to get loans to pay their taxes. This could give some space to those affected by the tax.

The discussion about the proposal increases as deadlines draw closer. While a few argue that a tax is necessary for revenue, others worry it could damage Australia’s investment environment.