NEW SUPERANNUATION TAX COMING FOR AUSTRALIA: WHAT YOU NEED TO KNOW

Wealthy Australians with more than $3 million in super will pay higher taxes after the Greens backed down on demands to strengthen the controversial laws. 

Labor's bill is expected to pass the Senate this week without amendment after securing Greens backing, ending a three‑year deadlock because they felt it didn't go far enough.

Starting from July 1, the tax rate on superannuation earnings for accounts above $3 million will be doubled to 30 per cent. 

Earnings above $4 million will be taxed at 40 per cent - higher than the original proposal. 

The thresholds will be indexed to prevent the number of Australians captured by the changes from blowing out over time. 

About one in 200 superannuants are expected to be affected.

The new package will also increase the low-income superannuation tax offset threshold from $37,000 to $45,000 and boost the maximum payment to $810. 

This will extend the tax break to more workers while increasing the maximum refund paid into their super. 

Greens economic justice spokesman Nick McKim said the existing tax framework had exacerbated inequality, contributed to the housing crisis and entrenched an intergenerational wealth divide.

'This budget is a once‑in‑a‑generation opportunity for ambitious tax reform, and we are opening the door for Labor to walk through,' he said.

Treasurer Jim Chalmers' original proposal faltered due to two contentious elements - the $3million threshold was not indexed to inflation, and the policy would have imposed tax on unrealised gains. 

The government later removed both measures, introduced a higher $10 million tier, and added an offset.

'We welcome this development and thank the Greens for their constructive engagement,' Chalmers said.

In 2028–29, the tax is projected to raise $2billion. 

The government is also weighing potential changes to the capital gains tax discount and negative gearing, although Dr Chalmers has stressed that no decisions have been made.

Under rules introduced in 1999 by the Howard government, investors currently pay tax on only half the profit they make when selling an investment property or other asset held for more than a year.

Previously, CGT worked differently, with profits adjusted for inflation rather than investors automatically receiving a 50 per cent discount.

Property owners can also move out of their principal place of residence and rent it out for up to six years while still remaining exempt from CGT when the home is eventually sold.

Labor previously took plans to halve the CGT discount to 25 per cent to the 2016 and 2019 elections, but both campaigns ended in defeat.

Those losses prompted Anthony Albanese to rule out changes to CGT after becoming Labor leader.

Meanwhile negative gearing allows property investors to deduct rental losses from their taxable income. 

This happens when costs such as mortgage interest and maintenance exceed the rent earned.

For decades, high-income investors have used the system to their advantage,  deducting mortgage interest at 47 per cent each year, before paying just 23.5 per cent tax on the capital gain when the property is sold. 

Read more

2026-03-10T23:05:24Z