Major Superannuation Tax Changes – What You Need to Know 

Parliament has now passed legislation introducing changes to the way very large superannuation balances are taxed. While these reforms have attracted widespread attention, it’s important to note they will affect fewer than 0.5% of Australians. For most people, there is no change to how their superannuation is taxed. 

Who is affected? 

The new rules apply only to individuals with total super balances exceeding $3 million, affecting an estimated 80,000 Australians. If your balance is below this threshold, existing superannuation tax arrangements continue to apply. 

What is the new Division 296 tax? 

From 1 July 2026, a new Division 296 tax will apply to earnings on superannuation balances above $3 million, using a tiered approach: 

• Up to $3 million – earnings continue to be taxed at 15% (unchanged). 
• $3 million to $10 million – earnings on this portion are taxed at an effective rate of 30%. 
• Above $10 million – earnings on amounts above this level are taxed at an effective rate of 40%. 

These thresholds will be indexed to CPI, meaning they will increase over time in line with inflation. 

What earnings does this apply to? 

The tax applies only to future realised earnings. Unrealised capital gains, where assets have not been sold, are not taxed under these new rules. 

A note on the first year: For the first year only, liability will be determined based on your total super balance at 30 June 2027, rather than at the start of the financial year. 

What This Means for You 

• Most clients won’t be affected 
  If your super balance is well below $3 million, these changes are unlikely to impact you at all. 

• High‑balance clients may need to review their strategy 
  If your individual super balance is close to, or expected to exceed, $3 million in the future, it may be worth reviewing your broader investment and retirement strategy to ensure it remains tax‑effective. 

• No need for immediate action 
  The new tax does not commence until 1 July 2026, providing time to plan and consider any adjustments if required. 



If you’d like to discuss how these changes may apply to your personal situation, or whether a review of your superannuation strategy is appropriate, please get in touch and speak with our Superannuation team. 

Telephone 03 5571 0111 or email reception@brentnallswv.com.au