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Proposed “$3 Million Super Tax” (Division 296): What SMSF Trustees Must Know Before 1 July 2025
What’s the Buzz About?
In June 2025, the financial media and SMSF community have been laser-focused on the Albanese Government’s proposed new Division 296 tax — a 30% tax on both realised and unrealised earnings for super balances over $3 million, starting 1 July 2025 (news.com.au, news.com.au). This policy has sparked major concern among high-balance superannuation holders and advisors, leading to widespread calls for restructuring and strategic planning prior to the financial year’s end (news.com.au, theaustralian.com.au).
Why This Matters for SMSF Trustees
- New & Retroactive Reach
The tax applies to both realised and unrealised gains, affecting those with balances above $3 million—even if they haven’t sold assets yet (news.com.au, news.com.au). - Financial Impact
Treasury projects around 500,000 accounts might breach the threshold over time, despite only 80,000 currently exceeding it (news.com.au, news.com.au). - Panic Moves in the Market
Trustees are already selling down assets to drop below the threshold and avoid the tax (news.com.au, theaustralian.com.au). Many advisers are warning clients to hold off until the legislation finalises—there are serious cash flow and succession planning risks (theaustralian.com.au, news.com.au).
Key Strategies to Consider Now
- Delay Asset Sales if Legislation Is Uncertain
Advisers recommend waiting for final Senate approval before triggering capital gains or locking in taxable income (theaustralian.com.au, news.com.au). - Explore Structuring Options
For trustees close to the $3 million mark, strategies include redistributing assets, using family trusts, or splitting pension accounts—though these come with legal and tax implications (news.com.au, theaustralian.com.au). - Seek Professional Advice
With advisers experiencing a surge in demand, now is the time to book tailored SMSF consultations (theaustralian.com.au, news.com.au).
Outlook & Next Steps
- Legislation Expected Soon
With Greens support, the bill is set to pass before 1 July 2025 (news.com.au, news.com.au). - Long-Term Affect on Wealth Management
Market analysts warn the tax could prompt riskier investment behaviors and complicate super strategy, especially for those with illiquid assets (news.com.au, theaustralian.com.au).
FAQs: Division 296 Tax & SMSFs
| Question | Answer |
|---|---|
| When does it start? | 1 July 2025 |
| Who pays it? | Any fund—SMSF or APRA-regulated—with a balance over $3M |
| How is it calculated? | 30% on earnings above the threshold, including unrealised gains |
| Should I sell assets now? | Not until the bill is finalised—moving now may lock in gains and taxable events |
| Where to get help? | Licensed SMSF advisers, accountants, and financial planners who specialise in high-balance strategies |
Bottom Line
The Division 296 “$3 million super tax” dominates headlines across June 2025—and for good reason. It introduces a new tax layer for high-balance SMSFs, affecting retirement planning, investment decisions, and fund structuring. Trustees with balances near or above $3 million must act strategically—but cautiously—to avoid unintended tax consequences. The best step right now?
➡️ Book a session with our SMSF specialist who understands Division 296 and can tailor advice to your financial and legacy goals.