3m Super Tax proposals Australian Superannuation

$3m Super Tax Explained

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Recently Treasurer Jim Chalmers provided a long-awaited announcement regarding the proposed Division 296 tax and super balances exceeding $3 million. Here’s a quick summary of it:

  • The Super Tax as a deferred start date and will become effective 1st of July 2026.
  • Only future realised earnings will be taxed, in other words you will only pay tax on capital gains when an Asset is sold.
  • In addition to the $3 million threshold for Division 296, introduce an even higher tiered Division 296 tax rate for those individuals with balances above $10 million:
  • Index the $3 million and $10 million thresholds in accordance with CPI, increasing the relevant thresholds in $150,000 and $500,000 increments, respectively.

Those of us who’s superannuation is under $3 million (individually held) need not worry, the Division 296 won’t apply and the total effective tax rate will still remain 15%.

For those who’s superannuation balance is approaching or exceeds $3 million it’s a good time to review your investment strategy and consider the impact of these changes to your future earnings and tax obligations.

If you have any queries related to super, don’t hesitate to get in touch with us at STS Accounting.