Tax Planning
How to Navigate Australia’s New Superannuation Tax Thresholds for High Balances
Superannuation tax changes coming from July 1, 2026 introduce **new tax rates on large super balances**, scrap the tax on unrealised gains, and add inflation indexing to thresholds—here’s what individuals need to plan now.
By NomadicTax Research Team • 6 min read • November 21, 2025
## Background
Australia’s government has overhauled its proposed superannuation tax changes originally introduced in 2023. Under the revised plan announced in mid-October 2025:
- Unrealised capital gains will no longer be taxed—only gains realized when assets are sold will be taxable. ([news.com.au](https://www.news.com.au/national/politics/labor-reveals-changes-to-looming-super-tax/news-story/53e80e0b0dc5e3e38eceafcbbce10997?utm_source=openai))
- New thresholds will apply: balances between **A$3 million and A$10 million** will be taxed at **30%**, while balances exceeding **A$10 million** will face a **40% tax rate** on earnings above those levels. Both thresholds will be indexed for inflation. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
- These changes will take effect from **1 July 2026**, pending successful passage through Parliament. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
## Implications & Who’s Affected
- Only a very small portion of super members are likely to be impacted—currently about **0.5%** of super accounts are over the A$3 million mark. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
- Without indexation, more people could cross the thresholds over time—hence the government’s inclusion of inflation adjustments. ([news.com.au](https://www.news.com.au/national/politics/labor-reveals-changes-to-looming-super-tax/news-story/53e80e0b0dc5e3e38eceafcbbce10997?utm_source=openai))
- Lower and middle super balances remain unaffected; earners with super balances well below the thresholds will see **no change**. But thresholds, once legislated, become a planning consideration.
## Planning Actions You Should Take Now
1. **Estimate your super balance trajectory** — project fund growth and consider if your balance might cross A$3 million or A$10 million in future years.
2. **Review investment mix and contribution strategies** — high-growth assets generate returns more likely to trigger higher-rate taxes on earnings; smoothing growth or timing contributions may help.
3. **Defer or time the realization of gains** — since only realized capital gains post-sale are taxed, managing when you sell becomes critical.
4. **Consult a financial advisor or tax specialist** to assess potential impact based on your income, super balance, and retirement timeline.
## Practical Example
*Jane* has A$2.8 million in her super as of 30 June 2025. She expects it to grow to A$3.1 million by June 2026. Under the new rules:
- Earnings on the excess A$100,000 in the 2025-26 year will be taxed at **30%**, when in prior rules no extra tax applies until crossing A$3 million.
- If she balances just under A$3 million by that date, she avoids higher tax. Paying attention to fund performance or withdrawing or consolidating may be helpful.
## Key Takeaways
- These changes only affect **high super balances**, so most Australians won’t see any new costs.
- Timing—of realization of gains, of contributions, of balance projections—matters now more than ever.
- Keep an eye on confirmed legislation to see if any further details shift before enforcement.
- If you expect to be close to thresholds, proactively revisit your strategy with advice.
**Stay informed**, plan early, and always verify how new laws apply to you once enacted.