Tax Planning
Superannuation Tax Overhauls: What Wealthy Australians Must Know
Australia’s reforms to superannuation tax concessions introduce thresholds, indexing, and taxes only on realised earnings—major changes for high-balance members.
By NomadicTax Research Team • 5 min read • November 23, 2025
## Background of the Super Concessions Reform
Australia’s government has revised its proposal to limit superannuation tax concessions for individuals with large balances. Key changes:
- The controversial plan to tax **unrealised gains** has been scrapped. Only **realised earnings** (interest, dividends) will be taxed. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
- The threshold of **AUD 3 million** for concessional taxation will be **indexed 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))
- A **tiered tax rate** has been introduced: earnings above $3 million will be taxed at **30%**, and those above $10 million at **40%**. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
- Implementation delayed till **1 July 2026**. ([reuters.com](https://www.reuters.com/world/asia-pacific/australia-overhauls-plan-hike-taxes-retirement-savings-wealthy-2025-10-13/?utm_source=openai))
## Who’s Affected?
- Individuals with total super balances **below $3 million** will continue under existing rules.
- Those with **$3M–$10M** in super will face **30% tax** on realised earnings above the threshold.
- Those above **$10M** will pay **40%** on earnings above that higher threshold.
## Practical Tax Planning Strategies
### Review your superannuation investment approach
- Focus on structuring investments so income is **realised in staged ways**, e.g., dividends or interest, rather than accumulating unrealised gains.
- Consider timing and nature of distributions and realisations to manage taxable events.
### Consider concessional contributions and withdrawals carefully
- Be mindful of how contributions increase your total balance and may push you into higher tax tiers.
- Where possible, plan withdrawals or rebalancing across financial years to smooth taxable earnings.
### Indexation and threshold tracking
- Keep an eye on how inflation adjustments affect your $3M baseline. Ask your super fund about their process.
- Forecast how future increases will change your tax exposure.
## Example Scenario
Suppose Jane has a super balance of **$5 million**. Under the new rules starting 1 July 2026:
- Earnings up to $3 million are taxed as usual within accumulation.
- Realised earnings between $3M–$5M will incur **30%** tax.
- If Jane had $12 million, earnings above $10M would be taxed at **40%**.
By timing high-earning investments and considering partial realisations before the threshold, Jane may reduce exposure.
## Implications & Risks
- Funds will need updated reporting and computation systems, and members must understand new disclosure requirements.
- Tax professionals will see new compliance obligations.
- Delays and political changes may shift implementation details, so staying informed is vital.
## Action Items
- Check your latest super fund statements and project your balance growth by mid-2026.
- Consult a financial advisor focused on tax and super to plan investments accordingly.
- For real estate or high return opportunities, assess whether returns will be realised vs unrealised.
These reforms aim for **more fairness** and to ensure the concessional tax treatment of super balances is targeted rather than broad, particularly for very high-balance holders. By proactively preparing, affected individuals can mitigate surprise tax bills and preserve retirement wealth.