Tax Planning
Superannuation Reforms 2026: What High-Balance Retirees Need to Know
Australia’s revised super tax rules introduce new tiers and scrap tax on unrealised gains—significant changes for those with large super balances.
By NomadicTax Research Team • 5-8 min read • November 24, 2025
## Understanding the Revised Superannuation Tax Structure starting 1 July 2026
Australia is introducing a **tiered tax on earnings for superannuation balances** to target high-balance accounts while improving fairness across the system. Key changes include:
- Balances between **A$3 million and A$10 million** will face a **new tax rate totalling 30%** on earnings above the A$3 million threshold. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
- Balances **above A$10 million** will be taxed at **40%** on earnings exceeding that level. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
This replaces earlier proposals to tax both realised and unrealised gains without indexation. The revised rules will apply **only to realised earnings** (dividends, interest, capital gains once sold) and introduce **indexation of thresholds** to inflation. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
## Who Is Affected
- Approximately **0.5% of super fund members**, around 80,000 people, will be impacted by the new tax tiers. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
- A very small number—about **8,000 Australians**—with super balances exceeding A$10 million will face the 40% rate. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
## Low-Income Adjustment: LISTO Improvements
To counterbalance impacts on high-balance accounts, updates are being made for low-income earners via LISTO (Low Income Superannuation Tax Offset):
- Eligibility income threshold raised from A$37,000 to **A$45,000** starting 1 July 2027. ([theguardian.com](https://www.theguardian.com/australia-news/2025/oct/13/new-rules-have-been-proposed-for-your-super-heres-what-you-need-to-know?utm_source=openai))
- Maximum LISTO payment increased from **A$500 to A$810 per year**. ([theguardian.com](https://www.theguardian.com/australia-news/2025/oct/13/new-rules-have-been-proposed-for-your-super-heres-what-you-need-to-know?utm_source=openai))
- About **1.3 million Australians**, predominantly women, will benefit from this change. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
## Actionable Strategies
- **Review your total super balance**: If you're close to the A$3 million or A$10 million thresholds, begin assessing potential exposure.
- **Time realisations carefully**: Since tax applies only to realised earnings, delaying the sale of assets with large gains may reduce exposure.
- **Maximise concessional contributions**: If you’re in a lower balance tier, focus on making use of concessional contribution limits before thresholds apply.
- **Explore pension-phase strategies**: Earnings in pension phase accounts are generally taxed at 0%. Transiting to pension phase may offer benefits under certain conditions.
## Example Scenario
Suppose Pat has A$4 million in super on 30 June 2026. Earnings from A$0–3 million are taxed at current rules (15%, or 0% if in pension phase). Earnings on the A$1 million that exceeds the A$3 million threshold will be taxed at 30%.
If Taylor has A$12 million, earnings above A$10 million will be taxed at 40%. This means earnings between A$3–10 million are taxed at 30%, and the earnings beyond A$10 million hit by the steeper rate.
## Legislative & Timing Considerations
- These changes are **not yet law**; legislation must pass to enact them. ([industrysuper.com](https://www.industrysuper.com/understand-super/super-changes/proposed-changes?utm_source=openai))
- The **effective date** is **1 July 2026**, giving stakeholders time to plan. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
## Final Thoughts
The new superannuation reforms aim to ensure **equity**—raising taxes only on earnings from large super balances (above A$3M and A$10M), excluding unrealised gains, and boosting benefits for lower-income workers. If you stand to be affected, early financial consultation, rebalancing assets or timing realisations can help mitigate higher tax impacts.