If your superannuation balance is approaching $3 million – or you run a self-managed super fund (SMSF) that has grown strongly – a new tax called Division 296 starts on 1 July 2026. The good news: the final version that passed Parliament in March 2026 is far milder than the one first proposed. Here is what SMSF trustees and high-balance members need to know.

What Division 296 does

From 1 July 2026, an extra 15% tax applies to the earnings on the part of your total superannuation balance above $3 million. For the portion above $10 million, the extra tax rises to 25%. It sits on top of the normal 15% tax inside super – it does not replace it.

Crucially, the tax applies only to the slice of your balance over the threshold, not your whole balance. If your total super is under $3 million, Division 296 does not affect you at all.

Two big improvements on the original proposal

  • No tax on unrealised gains. The original plan would have taxed paper gains – growth you had not actually banked. The final law works on a realised-earnings basis: dividends, interest, rent and realised capital gains. This was the change trustees and advisers fought hardest for.
  • The thresholds are indexed. The $3 million and $10 million thresholds are now indexed annually (in $150,000 and $500,000 steps) in line with the transfer balance cap – so people will not be quietly dragged into the net by inflation over time.

Who it affects

Division 296 is assessed on your total super across all funds, not per fund. The ATO calculates it and issues the assessment to you personally – you can pay it yourself or release the money from super. For most Gold Coast investors the first question is simple: are you over the threshold, or likely to be soon?

What to review before 30 June

  • Work out your total super balance across every fund as at 30 June 2026 – that is the starting point
  • If you are near $3 million, review your SMSF strategy – contributions, asset mix, and whether large lumpy assets still make sense inside super
  • Take care with illiquid assets (property, unlisted investments) – if a realised gain creates a Division 296 bill, you need cash to pay it
  • Do not make rushed withdrawals – for most people super is still the lowest-taxed structure available

Division 296 is now law and applies to earnings from the 2026-27 year onwards. It is not a reason to panic, but it is a reason to plan – particularly if your fund holds property or you expect to cross the threshold in the next few years.

At QC Accountants we help Gold Coast businesses and investors stay on top of changes like this. If anything here applies to you, book a chat or call (07) 5593 6060.

General information only — not financial or legal advice. Rules and thresholds change; check current requirements with the ATO (and QBCC where relevant) or speak to us before acting.