If your individual super balance is over $3 million, the government’s new plan is to tax the earnings above that line at 30% instead of the usual 15%. Yep—an extra 15% for the high flyers.
But there’s a kicker.
The tax applies to unrealised gains. So, even if you didn’t sell anything or make real cash, the tax still applies. If your super fund just went up in value—even just on paper—you might still have to pay tax on that.
So you get taxed on money you don’t have yet.
Yep, weird. Welcome to Division 296. New rules. New vibes. Same old taxman.
As of now (June 2025):
If your individual super balance is over $3m or nearing this mark, there are a few things to consider.
It’s early days, there’s no need to sell up and stash your cash under your bed.
If you’re anywhere near $3 million, have a chat with your advisor. Or your accountant.
Got property or chunky, hard-to-sell assets in your SMSF? If you can’t access your super yet, you’ll want to make sure you’re not caught needing cash when all you’ve got is concrete. Review your fund’s ability to handle a tax bill without panic-selling.
Unrealised gains mean every revaluation matters. You don’t want your beach shack being called a “luxury coastal retreat” unless you’re actually selling it.
Super doesn’t automatically follow your will, and now, legacy planning just got a new twist. Transferring wealth between generations can still work, but you’ll need some good advice.
Run the actual figures. Model how much Division 296 tax you might pay and compare that to other strategies—like investing outside of super. The hit might not be as scary as it sounds. And even if it is? At least you’ll know what you’re working with.
There’s no need to panic or make any rash moves, but some planning could keep you from getting a surprise tax bill with your Sunday paper.
So if you’re hovering near $3 million in super, its worth a chat with your trusted advisor.
Need help crunching it? The team at PAL are all over it. Reach out to the team for any assistance.
Disclaimer: This article is here to give you general info only, not professional advice specific to your unique situation. While efforts are made to ensure accuracy, the content may change over time. We can’t take responsibility for any decisions based on the contents of this article, so be sure to chat with your accountant or advisor first!
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