Tax Planning
Tax Planning for Australia’s Revised Superannuation Tax on Wealthy Balances
Australia is set to revise tax rates for large super balances, with new thresholds and a delayed start. This article unpacks what it means for high-balance super fund members and strategies you can use now.
By NomadicTax Research Team • 5-8 min read • November 15, 2025
## What’s Changing with Super Tax on Large Balances
The government has **revised its policy** on taxing superannuation balances exceeding significant thresholds. Key updates include:
- **Thresholds**: Balances between **A$3 million and A$10 million** will be taxed at **30%**, and balances above **A$10 million** will face a **40% rate** on earnings. The tax rate remains 15% for most balances.
- **No unrealised gains**: Tax will apply only on **realised returns** — gains you actually sell or dispose of.
- **Indexation**: The thresholds will be adjusted for inflation going forward.
- **Effective date delayed**: The changes will begin from **1 July 2026**.
- **Low-income offset increased**: The Low Income Superannuation Tax Offset (LISTO) will rise from **A$500 to A$810**, with expanded eligibility up to approximately **A$45,000** income by 2027.
## Impacts for High-Balance Super Owners
| Situation | What Happens Differently | Considerations & Strategy |
|-----------|--------------------------|-----------------------------|
| You have **A$4 million** in super | Earnings above the standard rate (30%) taxed at higher rate for that portion above A$3 million | Spread contributions or distributions to avoid pushing into higher rate tier
| Early retiree with large unrealised gains | Won’t be taxed until gains are realised — provides flexibility | Use timing of asset sales to your advantage, especially across years |
| Low-income earner under A$45,000 | You’ll benefit from the higher offset | Ensure your income is accurately reported to get LISTO benefits |
## Actionable Tax Planning Tips
- **Review asset types** in super: Non-liquid assets (properties, private equity) may incur higher tax when sells occur — plan timing.
- **Contribution timing**: Delaying contributions into new financial year could defer exposure.
- **Diversify investment vehicles** outside super for amounts likely to exceed thresholds.
- **Use market corrections**: In years with downturns, realising losses could offset realized gains when sold later.
- **Engage a financial planner or super specialist**: Super changes have downstream effects on estate planning and concessional caps.
## Example Scenario
> Janet has a superannuation balance of A$5 million with earnings of A$300,000 in 2026-27. Under new rules, earnings on the first A$3 million stay taxed at standard rate; only the portion from A$3-A$5 million taxed at 30%. If she waits to realise gains or moves portions into non-super investment, she could reduce exposure.
By planning ahead of the 1 July 2026 effective date, and using opportunities to spread earnings, contributions, or realise gains strategically, high-balance super owners can reduce future tax liabilities.