Australia Passes Unrealised Gains Tax, But Politicians Stay Exempt

Australia will impose a 15% tax on unrealised gains in superannuation accounts above a $3 million threshold from July 1, 2025.

Framed as the Treasury Laws Amendment (Better Targeted Superannuation Concessions) Bill 2023, the change doubles the tax on earnings in excess of $3 million—raising it from 15% to 30%—and is projected to raise A$2.3 billion in 2027–28 and A$40 billion over the next decade.

Under current law, earnings in the accumulation phase are taxed at a flat 15%, while retirement-phase earnings are tax-exempt. The new levy applies an additional 15% on notional gains—profits that have not been realised in cash—above the $3 million cap.

Critics have highlighted that many of those designing the policy will not be subject to it. The bill exempts state governors, ministers and their staff, senior public servants, judges and police commissioners.

Beyond the immediate impact on 80,000 high-balance accounts—which represent just 0.5% of super funds—experts warn of creeping scope. Diana Mousina of AMP calculates that, without indexing the $3 million threshold to inflation, a 22-year-old earning average wages could breach the cap by retirement.

Opposition parties and lobbyists argue it undermines retirement savings and breaks pre-election promises. The SMSF Alliance warns that farmers and other holders of illiquid assets may be forced to sell property to meet cash tax obligations.

However, Federal Treasurer Jim Chalmers insists the policy will proceed, dismissing complaints as a necessary budget repair.

Industry super funds are poised to gain as larger, diversified pools can liquidate units to cover tax bills, whereas SMSFs may need to offload long-term holdings.

With the Bill awaiting a Senate vote—where the Greens may push for a lower $2 million threshold or automatic indexation—the outcome remains uncertain.

Information for this story was found via The Guardian, The Australian, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.