From 1 July 2025, the federal government plans to introduce a new tax rule—Division 296, which will affect Australians with large superannuation balances.
Under the proposal, if your total super balance exceeds $3 million, the earnings on the portion above that threshold will be taxed at 15%, on top of the existing 15% tax that already applies. This brings the effective tax rate to 30% on earnings linked to balances above $3 million.
It’s important to note:
- The $3 million cap applies per individual, not per account.
- This tax is based on unrealised earnings, meaning it includes investment gains even if you haven’t sold the asset.
This change won’t impact the majority of Australians, but for those with higher super balances—often self-managed super fund (SMSF) members—it may affect long-term planning strategies.
If you’re unsure whether this affects you or your retirement plans, now is a good time to speak with your financial adviser.
