by Dejan Pekic
Division 296 Tax Passes Parliament
Posted by Dejan Pekic
Federal Parliament has this week passed the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026, in conjunction with the Division 296 Tax.
As we reported in October last year in our Guide to the Reworked Superannuation Tax Changes, the new tax will affect those with superannuation balances over $3 million and, most significantly, those with balances over $10 million (about 8,000 Australians).
Coming into effect from 1 July this year, the Bill passed the Senate with no amendments. The key points include:
- A two-tier tax on large super balances that includes an additional 15% tax for total superannuation balances between $3 million and $10 million, and an additional 25% on earnings attributable to balances above $10 million.
- The tax applies to the proportion of super balances over the thresholds only (existing tax rates remain for the first $3 million of your super).
- Thresholds will be indexed to the Consumer Price Index.
- Tax is calculated on realised (taxable) earnings only, such as interest, dividends or profits from the sale of physical assets.
- Additional income thresholds and maximum payment rate of LISTO (low-income super tax offset) are applicable from 1 July 2027.
While formal regulations relating to the tax are yet to be released, it may be a good time to review your superannuation strategy. We’re here for a confidential discussion and tailored investment advice.
General Advice Warning:
The information in this blog is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether the information is appropriate for you and seek professional advice before making any financial decisions.
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