Australia Rolls Out Higher Tax on Large Superannuation Balances
A new 15% tax on high-balance superannuation earnings over A$3 million will require wealthy expats in Australia to restructure their long-term retirement and investment strategies.
Australia Rolls Out Higher Tax on Large Superannuation Balances
Australia has officially passed the Division 296 tax, a significant shift in how the government treats high-balance retirement accounts. Starting 1 July 2026, the tax rate on superannuation earnings will jump from 15% to 30% for balances exceeding A$3 million. For those with more than A$10 million in their funds, the rate climbs even higher to 40%.
The tax applies specifically to the portion of earnings linked to the balance above these thresholds. Unlike earlier proposals, the final version of the law focuses on realized earnings rather than unrealized gains. The Australian Taxation Office (ATO) will assess these liabilities annually based on the total superannuation balance at the end of the financial year.
Who is affected
This change impacts individuals rather than couples or funds as a whole. While most digital nomads and short-term travelers won’t have enough in Australian super to trigger the tax, it is a major development for long-term expats and non-residents who have built significant wealth within the Australian system.
Even if you live abroad, Australian superannuation is generally taxed on a worldwide basis. High-net-worth nomads using Self-Managed Super Funds (SMSFs) or those in the retirement phase will still be subject to these new tiers if their balances cross the A$3 million mark.
What to do next
If you are a high-earning expat with significant Australian assets, you have until the 30 June 2026 transitional deadline to review your holdings. You may want to consider:
- Restructuring your SMSF or exploring foreign pension options.
- Withdrawing excess funds from the super environment if it no longer serves your tax strategy.
- Planning for liquidity, as the ATO allows you to pay the tax either personally or directly from your super fund.
Thresholds are expected to be indexed to the CPI in increments of A$150,000, so the actual cutoff may be slightly higher by the time the first assessments arrive in 2027. Stay updated on nomad news to see how these regulations evolve.
Read our full Australia guide for the complete picture.