By Tina Zawila
The much debated proposed $3 million super tax (officially called Division 296) has seen significant movement in recent days – and it’s mostly good news for Australians with larger super balances.
A quick recap:
The government’s plan is to charge an extra 15% tax on earnings from super balances above $3 million. This means people with less than $3 million in super aren’t affected.
The idea is to make super tax concessions “fairer”, but when the proposal was first released, there was a controversial feature – it included tax on unrealised gains. In simple terms, that meant you could be taxed on paper profits (for example, if property or shares increased in value but hadn’t been sold, you would still pay tax on the increase).
What’s new:
In a surprise announcement, Treasurer Jim Chalmers has said that unrealised gains won’t be taxed. The extra tax will only apply to realised earnings – that is, money actually made from sales or investments.
The start date has also been pushed back a year to 1 July 2026, and the $3 million threshold will be indexed so it increases over time with inflation.
There’s also talk of a higher tier – super balances over $10 million may face a 40% tax rate on earnings.
What it means for you:
If your super balance is under $3 million, nothing changes. For those above it,this is still an extra tax, but the latest update makes it fairer and easier to manage, especially for people with assets like property inside super.
Importantly, the legislation still needs to go through Parliament, so you should seek professional financial and taxation advice before acting on any strategies regarding this matter.
The team at UHY Haines Norton CQ are here to help you with all of your taxation and financial planning needs. Call us today on 0749721300.
