Big Change Coming: New Tax on Large Super Balances (Division 296)
This is one of the biggest shifts to super in years – but it only affects higher balances.
How it works
From 1 July 2026, there’s an extra tax on the earnings from the part of your super balance above $3 million.
The extra tax is 15% – on top of the usual 15% super fund tax.
So in practical terms:
- Balances between $3 m to $10 m→ you could pay 30% tax on those earnings
- Balances above $10m → the rate could go up to 40%
One thing to keep in mind: this tax applies to earnings, not your total balance.
Why this is tricky
Unlike most tax rules, this one can apply to unrealised gains – meaning if your assets go up in value, you could be taxed even before you sell them.
That creates a real issue for SMSFs holding property or other illiquid assets. You might get a tax bill without having the cash to pay it.
Who needs to pay attention?
You might be affected if:
- You’ve built up a large super balance over time (e.g. business owners, professionals)
- You’re an SMSF trustee, especially with property or significant investments
- You’re planning large contributions or asset transfers into super
And don’t assume you’re safe just because you’re below $3m today. Growth over the next few years could lift you above the threshold.
What you can do now
The rules are law, but there’s still time to plan:
- Think about whether it still makes sense to keep building wealth inside super
- Look at other structures like family trusts or company ownership
- Review any contributions you’re planning before 30 June 2026
- Consider the timing of asset sales or rebalancing
Getting advice sooner rather than later matters here – once the tax applies, your options get tighter.
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