Big Change to Super: What the $3 Million Tax Means for You

By Tina Zawila

Superannuation has been part of Australian life since 1992, when the Superannuation Guarantee was introduced to help everyday workers save for retirement. But for the first time in over 30 years, we’re seeing a fundamental shift—one that’s raising eyebrows well beyond the wealthy.

From 2025–26, the Federal Government plans to impose an extra 15% tax on unrealised earnings in super balances above $3 million. This means you could be taxed not just on what you actually earn, but also on paper gains—profits you haven’t yet received. It's a move with no precedent in the Australian tax system.

While the change was announced in early 2023, many political commentators believe that opponents of the policy were caught flat-footed, having assumed Labor wouldn't be re-elected in this year’s Federal Election, therefore the proposed policy wasn’t robustly debated to the extent that such a major reform typically warrants.  Yet here we are, with Labor holding the most Lower House seats for a ruling party since John Howard’s first election in 1996.  Combined with the Greens holding the balance of power in the Senate, all of a sudden, taxing unrealised gains is back on the menu.

This policy signals a significant departure from the principle that super is a vehicle for retirement savings, not a revenue target. Even if your balance is well below $3 million, it’s worth paying attention. Once the taxation of unrealised gains begins, it's hard to predict where future governments might go.

Some retirees are already taking action by moving money out of superannuation into other structures. Ironically, these actions have reinforced the government’s position that large superannuation balances are not essential for retirement and instead are simply a way to tax effectively structure wealth, which undermines the case against the reform.

While this proposed change affects a small percentage of Australians today, we should all be concerned about the introduction of taxation on unrealised gains and the precedent this sets.

If you need professional advice regarding your superannuation, investments or tax position, please call our professional team at UHY Haines Norton CQ on 07 49721300.