The Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 and the supplementary Imposition Bill passed Parliament on 10 March 2026 and received royal assent on 13 March 2026.
The legislation introduces higher taxes on large superannuation balances, with changes taking effect from 1 July 2026.
What’s changed?
At the centre of the amendments is the insertion of Division 296 into the Income Tax Assessment Act 1997 (Cth) (ITAA 1997).
From 1 July 2026, a new Division 296 tax will be imposed on an individual’s superannuation investment earnings at the following rates:
| Total superannuation balance (TSB) | Current tax rate | New tax rate |
|---|---|---|
| Under $3 million | 15% | 15% |
| Between $3 million and $10 million | 15% | 30% |
| Over $10 million | 15% | 40% |
In short, the amendments reduce existing tax concessions by imposing an additional tax of:
15% on earnings based on the proportion of an individual’s TSB exceeding the $3 million threshold; and
a further 10% on earnings based on the proportion of an individual’s TSB exceeding the $10 million threshold.
Both the $3 million and $10 million thresholds will be indexed to the Consumer Price Index each year. The tax will only apply to realised earnings and not unrealised capital gains.
Although the tax is imposed on individuals, it can also be paid from superannuation.
In addition, from 1 July 2027, the low-income superannuation tax offset (LISTO) income threshold will increase from $37,000 to $45,000. The maximum annual offset payment has also risen from $500 to $810 to account for recent increases in the Superannuation Guarantee rate.
What this means for you
For individuals with higher superannuation balances, these changes represent a clear shift in the tax landscape and may influence how superannuation is used as part of a broader wealth strategy.
Throughout the consultation process, our view has been to keep calm and carry in response to these changes.
Now that they have received royal assent, it may be time to get in touch with your advisers to plan ahead for 30 June 2026. We will continue to keep you up to date on further developments.
This article was written with the assistance of Jonathan Potenza, Law Graduate.
