Do You Pay Tax on Crypto You Haven't Sold?

If your crypto is up but still sitting in your wallet, do you owe tax on the gain? For plain buying and holding, the answer is no. But crypto has several ways of creating a tax bill before you ever hit sell, and missing them is a common and costly mistake. Here is exactly where the line sits.

Holding is not a taxable event

Buying crypto and holding it, even as it rises sharply, produces an unrealised gain. Australian capital gains tax only applies when you dispose of the asset. A gain on paper is not taxed, and you do not report it, until you do something with the coin.

What counts as a disposal

You trigger CGT when you dispose of crypto, which is broader than just selling for cash. It includes:

• Selling crypto for Australian dollars.
• Swapping one crypto for another.
• Spending crypto on goods or services.
• Gifting crypto to someone else.

Each of these is a CGT event, even the ones where no cash changes hands.

The rewards exception

Some crypto pays you while you hold it, and that income is taxed on receipt, not on sale. Staking rewards, many airdrops, DeFi yield and crypto interest are generally treated as ordinary income at their Australian dollar value on the day you receive them, even if you never sell them. So a holder who stakes can owe tax without making a single sale.

Those reward coins then carry a cost base equal to the value you were taxed on, and a later sale is a separate CGT event on any change in value since.

Two quick examples

Pure holder. You buy Bitcoin and leave it in your wallet for two years while it doubles. You have no tax to report until you dispose of it.

Holder who stakes. You hold Ethereum and stake it, receiving rewards each month. Each reward is income at its value on the day, reportable this year, even though you have not sold anything.

Moving between your own wallets is not a sale

Transferring crypto between wallets you control is not a disposal and is not taxed. Keep records so it is not mistaken for a sale, and note that a network fee paid in crypto can be a tiny disposal in itself.

Why your cost base still matters now

Even with no CGT due yet, the value at which you acquired each coin sets your future gain. Recording it while the details are fresh is what stops you overpaying, or scrambling for records, when you eventually sell.

Know what is taxable and when

Summ separates your untaxed holdings from the rewards that count as income, so nothing is missed and nothing is double counted.

Try Summ for free.

Frequently asked questions

Do I pay tax if my crypto goes up but I hold it? No. An unrealised gain is not taxed. CGT applies when you dispose of the coin.

Is swapping one coin for another taxable, even without cashing out? Yes. A crypto-to-crypto swap is a disposal and a CGT event.

Do I pay tax on staking rewards I have not sold? Yes. Rewards are income at their value on receipt, whether or not you sell them.

Is moving crypto between my wallets taxable? No, transfers between your own wallets are not disposals, but keep the records.

This article is general information only and does not take your personal circumstances into account. For advice specific to your situation, speak to a registered tax agent.