What the New High‑Balance Super Tax Means in Practice

From 1 July 2026, Australia’s revised Division 296 tax will take effect, bringing in a new framework for taxing superannuation balances above key thresholds.  

While this measure will initially affect a relatively small group of Australians, it represents a material change in how tax concessions apply to high‑balance superannuation and warrants early consideration for those approaching the thresholds. 

 

What’s Changing? 

Division 296 introduces an additional tax on superannuation earnings, assessed to the individual (not the super fund), where their total superannuation balance exceeds $3 million.  

 

Division 296 is calculated across all super interests, including SMSFs and APRA‑regulated funds. It does not cap how much can be held in super, but reduces the concessional tax treatment for higher balances 

 

Under the final legislation: 

• Earnings attributable to balances above $3 million and up to $10 million will have an effective tax rate of 30%  

• Earnings attributable to balances above $10 million ill have an effective tax rate of 40% 

 

Importantly: 

• The tax applies only to the portion of earnings relating to the amount above the relevant threshold, not the entire balance 

• The tax is assessed to the individual, similar in concept to Division 293 

• Individuals can generally choose to pay the tax personally or via a release authority from their super fund 

 

The final form of Division 296 is more targeted than earlier versions: 

• Unrealised gains are not taxed 

• A second, higher threshold at $10 million has been introduced 

• Thresholds are indexed 

• The first assessments are expected after 30 June 2027, providing a short lead‑in period  

These changes addressed many of the key concerns raised during consultation, particularly for SMSFs holding illiquid assets. 

 

Who should be paying attention? 

Division 296 is most relevant for: 

• Individuals with current or projected super balances near or above $3 million 

• SMSF members with long‑term growth strategies 

• High‑income professionals, business owners or groups where super balances are rising faster than expected 

• Clients with estate or succession planning linked closely to superannuation 

 

While not many individuals are affected today, the combination of balance growth and non‑indexed concessional contributions over time means more people may be impacted in the future. 

 

Timing Matters 

 

While transitional arrangements apply for the 2026-2027 income year, SMSF trustees should be reviewing asset holdings and the potential impact of the CGT cost-base reset well before 30 June 2026.  

 

Electing to apply the cost‑base reset allows eligible superannuation funds to reset the tax cost base of assets to their market value at 30 June 2026, meaning only future capital growth will be subject to the new Division 296 regime. As a result, obtaining robust and supportable valuations, particularly for property, for the 2025–26 financial year becomes even more critical. 

 

Importantly, this transitional CGT relief is available to all eligible funds, not only those where a member currently has a total superannuation balance exceeding $3 million.  

 

How The Macro Group Can Help 

At Macro Group, we’re helping clients: 

• understand whether Division 296 is likely to apply now or in the future 

• model longer‑term tax outcomes across super and non‑super structures 

• assess whether the cost base reset is relevant or beneficial 

• integrate superannuation planning into broader business, investment and estate planning discussions  

 

If you’d like clarity on how Division 296 may affect your personal and business wealth planning, The Macro Group can help. We work with you to understand the implications and move forward with confidence.