From 1 July 2025, a new Division 296 tax will impose an additional 15% tax (total 30%) on superannuation earnings for balances exceeding $3 million, including on "unrealised" gains. A further 10% tax (total 40%) applies to earnings on balances over $10 million, with these changes aimed at taxing high-balance accounts.
There's 15% capital gains tax on returns if your super is in the accumulation phase. This may be reduced to 10% if the super fund has owned the asset for 12 months or more.
In 2026, a single filer won't pay any tax on long-term capital gains if their total taxable income is $49,450 or below. However, they'll pay 15% on capital gains if their income is $49,451 to $545,500. Above that income level, the long-term rate jumps to 20%.
The new $3 million super tax is a proposed tax change that will impose an additional 15% tax on investment earnings, including unrealised gains, for super balances exceeding $3 million. This would bring the total tax rate on these earnings to 30%.
On a $100,000 capital gain, you'll likely pay 15% for long-term gains, resulting in about $15,000 in federal tax (plus potential state tax), but it could be 0% or 20% depending on your total taxable income and filing status, while short-term gains are taxed as ordinary income (potentially 22-24%).
The "6-year rule" for Capital Gains Tax (CGT) in Australia allows you to treat a former main residence as tax-exempt for up to six years after you move out, even if you rent it out, enabling you to avoid CGT on any growth during that period. You qualify by moving out, choosing to treat it as your main home for tax, and can reset the rule by moving back in. If you rent it out for longer than six years, only the portion of the gain after the six-year mark becomes taxable.
In June 2021 there were about 55,000 individuals with a balance over $3 million, up from around 35,000 in June 2019. Given recent investment returns and further contributions, the Treasury estimate that by July 2025 there will be around 80,000 individuals with more than $3 million in superannuation is quite reasonable.
If you're aged 60 or over and withdraw a lump sum: You don't pay any tax when you withdraw from a taxed super fund.
To avoid or reduce capital gains tax for 2025-26, hold investments over a year for lower long-term rates, use tax-advantaged accounts like IRAs/401(k)s/ISAs, offset gains with losses, donate appreciated assets to charity, use a primary residence exclusion, or consider strategies like 1031 exchanges for real estate. Spreading sales across tax years and gifting to a spouse are also effective methods to stay within annual allowances.
How much capital gains tax you pay depends on how long you held the asset and your total taxable income, with long-term gains (over a year) taxed at 0%, 15%, or 20%, while short-term gains (a year or less) are taxed at your higher ordinary income tax rate (10-37%); you'll also need to factor in potential Net Investment Income Tax (NIIT) and state taxes, so check your income against the brackets.
Reducing CGT with personal deductible contributions. Making a tax-deductible super contribution reduces your taxable income and can assist to minimise the impact of tax on capital gains if you contribute to super in the same financial year that you make a capital gain.
To qualify for 0% capital gains tax, you must have long-term capital gains (assets held over a year) and your taxable income (after deductions) must fall below specific IRS thresholds, which change annually but are roughly <$48,350 for single filers and <$96,700 for married filing jointly for the 2025 tax year, allowing for higher total income when combined with deductions like the standard deduction. The key is keeping your adjusted gross income (AGI) low enough so that after subtracting deductions, your taxable income remains within these limits.
The bring-forward rule enables you to accelerate your super contributions by using up to three years' worth of non-concessional (after-tax) contributions caps in a single year. This means you could contribute up to three times the annual limit in one go, or spread your contribution out over two to three years.
On a $100,000 capital gain, you'll likely pay 15% for long-term gains, resulting in about $15,000 in federal tax (plus potential state tax), but it could be 0% or 20% depending on your total taxable income and filing status, while short-term gains are taxed as ordinary income (potentially 22-24%).
Superannuation is taxed concessionally
Accumulation phase – investment earnings are taxed at a flat 15 per cent (can be 10 per cent for capital gains) which will be concessional compared with higher individual marginal rates.
The capital gains tax over 65 is a tax that applies to taxable capital gains realized by individuals over the age of 65. The tax rate starts at 0% for long-term capital gains on assets held for more than one year and 15% for short-term capital gains on assets held for less than one year.