Forget the old headlines, this isn’t the same $3M super tax you read about months ago. After industry pushback, the government has rewritten the rules. Here are the changes:
- No tax on unrealised gains. That’s gone. Only realised earnings such as – dividends, interest, rent and actual capital gains, are in the firing line.
- Tiered thresholds, not flat rates. From 1 July 2026, balances above $3M will be taxed at an effective rate of 30%. Above $10M? Taxed at an effective rate of 40%.
- Effective rates are lower than you think. A $4M balance won’t cop 30% across the board. Given that it is an effective rate, it will be closer to 18.75%.
- Low-income earners get a boost. From 1 July 2027, LISTO jumps from $500 to $810, and the income threshold rises from $37k to $45K.
Sounds simple? It’s not. Here’s where the blindsides hit:
The Wealth Shuffle
Big players will move fast, shifting assets into trusts and alternative structures. This isn’t about paying more tax, it’s about staying ahead of the game.
The Liquidity Trap
Property-heavy SMSFs still face pressure. Even without unrealised gains in the mix, selling assets to fund tax bills could become reality.
The Middle-Class Mirage
Hovering near $3M? You’re in the danger zone. The squeeze starts here, and waiting until 2026 is a mistake.
The Silent Squeeze
Indexed thresholds help, but contribution caps and valuation shifts will quietly erode flexibility. If you’re not planning now, you’re planning to pay later.
At Rees Group, we don’t just interpret legislation, we anticipate its impact. The question isn’t what’s changing, it’s how you’ll adapt.
Ready to get ahead of the curve?
Let’s talk strategy before the squeeze starts.
Disclaimer: The information in this article is of a general nature. It does not take your specific needs or circumstances into consideration. You should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.
