Changes to the $3m Super tax

The $3m super tax which was originally proposed in February 2023 has now been changed in response to a great deal of push back and public pressure.

The Government has recently announced key changes to the proposal which would impact the tax treatment of superannuation savings over $3 million.

Key changes:

Tax only on actual profits
Originally, those affected would be taxed on unrealised gains – meaning that if your super investments went up in value, you could still be taxed. Under the new proposal, you’ll only pay tax on realised gains such as selling an investment to make a profit.

The $3 million limit will rise over time
The previous threshold was fixed at $3 million, which meant that inflation would see more people reaching the threshold and being subject to the tax.

Now, the threshold will be indexed, which means it will increase over time to keep up with inflation.

Higher tax for very large balances
An additional threshold of $10 million will also be introduced which means:

• Earnings on balances above $3 million will be taxed at 30%
• Earnings on balances above $10 million will be taxed at 40%.

Start date pushed back
This new ruling will start in July 2026 – allowing a little more time for people to prepare.

Defined benefit pensions included
The Government will also ensure that the new tax rules apply fairly to defined benefit pensions (eg public servants).

Whilst this continues to be a hot topic, especially given these changes to the proposed bill, it’s still too early to be considering how to manage this tax. We will continue to monitor the situation and provide information when necessary.

If you have any questions about the changes to this proposed tax, please feel free to contact us.

At the same time, the Government also made an announcement for low-income earners.
The Low Income Superannuation Tax Offset (LISTO) – a government payment which helps low-income earners grow their super, will increase from $500 to $810. More people (earning up to $45,000) will now qualify for it.

Publish date: 14/10/25