The Albanese government has proposed a significant change to the way superannuation is taxed, introducing a 30% tax on unrealised capital gains for balances above $3 million. This means that even if assets inside a super fund haven’t been sold, their paper increase in value could still trigger a tax bill.

This proposal, set to begin on 1 July 2025, has major implications for property investors, particularly those with self-managed super funds (SMSFs). Many Australians hold direct property through their SMSFs, using real estate as a long-term strategy to build passive income and secure their retirement. Under the proposed rules, the growing value of these properties could attract tax even without any transaction taking place.

With concerns already rising about how this could affect liquidity, long-term planning, and retirement confidence, investors are seeking clarity and guidance. For those who own, or are planning to buy, property through super, understanding what this change means and how to respond could make a big difference to financial outcomes in the years ahead.

What Is the Proposed Super Tax?

Key Features

The proposed change targets Australians with high super balances and introduces a new method of taxation within the system. The key features include:

• Threshold: Applies to superannuation balances exceeding $3 million.

• Tax Type: Introduces a 30% tax on unrealised capital gains. This means any increase in asset value, whether or not it has been sold, could be taxed.

• Start Date: Set to take effect from 1 July 2025.

This proposal represents a shift from the traditional approach, where tax is only applied once assets are sold and gains are realised. It may significantly affect how property and other illiquid assets are managed within self-managed super funds (SMSFs).

Current Status

• Legislative Progress: The bill has passed the House of Representatives but has not yet cleared the Senate.

• Uncertainty Ahead: There is still the potential for this proposal to be amended, delayed, or rejected in the Senate. However, given the momentum, many investors are already reassessing their superannuation strategies.

Implications for Property Investors

Taxation Without Sale

One of the most challenging aspects of the proposed superannuation tax is its focus on unrealised gains. Investors could face annual tax bills based on increases in the value of property, even if no transaction has taken place.

• This may lead to yearly tax liabilities simply because a property held within super has increased in market value.
• Since real estate is illiquid, finding the cash to pay the tax can become difficult, especially if the property is intended as a long-term hold.

Liquidity Concerns

Property is not a liquid asset. If a tax bill arises due to valuation increases, investors may be forced to act quickly to raise funds.

• Some may have no choice but to sell assets within their super fund to meet tax obligations.
• Forced or rushed sales can undermine long-term financial plans and lead to losses if market conditions are unfavourable.

Impact on Investment Strategies

The new rule could change the way Australians use their super to invest in property.

• Property has long been a preferred asset class in SMSFs due to its stable long-term returns and passive income potential.
• With the risk of being taxed on paper gains, some trustees may shift away from real estate and consider more liquid or lower-growth investments.
• SMSF strategies may need to be revisited to account for this shift, especially for those nearing the $3 million threshold.

Broader Economic and Social Considerations

Retirement Planning Challenges

Superannuation was designed to help Australians build long-term wealth and reduce dependence on the aged pension. The proposed tax may discourage people from using super to grow their retirement funds.

• Taxing unrealised gains could lead individuals to keep assets outside super, where such taxes don’t apply.
• This shift may result in more Australians relying on government support later in life, putting added pressure on public resources.

Indexation Issues

The $3 million threshold has not been tied to inflation, which could create unintended effects over time.

• As inflation continues to erode purchasing power, the real value of $3 million will decrease.
• In future decades, many middle-income Australians who wouldn’t currently see themselves as wealthy may find themselves caught by this tax.

Precedent for Future Taxation

One of the biggest concerns among investors is that this proposal could open the door to further changes in tax policy.

• If taxation on unrealised gains is accepted in superannuation, it could eventually apply to other structures such as trusts or even personal holdings.
• Property, shares, and other appreciating assets held outside of super could face similar treatment if this approach becomes normalised in future budgets.

Arguments in Favour of the Tax

Equity and Fairness

Supporters of the proposal argue that the tax targets a narrow group of high-wealth individuals and creates a more balanced system.

• The change applies only to superannuation balances above $3 million, which currently affects a small portion of the population, less than 1%.
• From this perspective, the policy is aimed at reducing tax advantages for the wealthiest Australians without impacting the average worker.

Budgetary Considerations

Australia is currently managing ongoing budget pressures, and this policy has been framed as one way to improve government finances.

• The tax is intended to raise additional revenue to help fund essential services such as healthcare, education, and infrastructure.
• Addressing structural budget deficits through targeted revenue measures is viewed by some as a more sustainable approach than cutting public spending.

Tax Deferral Concerns

Another key justification is that taxing unrealised gains closes what some see as a loophole in the system.

• High-balance super accounts often contain assets that are held long term, allowing capital gains to grow without being taxed for years or even decades.
• By taxing gains annually, even if they’re unrealised, the government encourages more regular tax contributions from wealthy account holders.

How BuyerAgentFinder.com.au Can Assist

Expert Guidance

BuyerAgentFinder.com.au connects property investors with trusted buyer’s agents who understand both current and emerging regulatory challenges.

• These professionals offer experience in managing property purchases within and outside of superannuation funds.

• They help you make smart decisions based on your goals, risk profile, and structure—whether you’re using an SMSF or investing personally.

Strategic Planning

With new tax rules on the horizon, planning ahead is more important than ever.

• BuyerAgentFinder.com.au helps you find buyer’s agents who can create personalised investment strategies that align with your financial goals and any future tax changes.

• Whether you’re looking to restructure your portfolio or explore safer markets, the right support can help you act with confidence.

Market Analysis

In a shifting market, access to current data and insights is essential.

• The platform connects you with buyer’s agents who provide local market knowledge and real-time property insights.

• From rental yield forecasts to suburb-level growth projections, you’ll be better equipped to make decisions in a changing policy environment.

Conclusion

The proposed tax on unrealised gains in superannuation is set to reshape how many Australians approach their retirement planning—especially those using property as part of their strategy. From potential liquidity challenges to long-term shifts in how SMSFs are structured, property investors may need to reconsider how and where they invest under these new rules.

With the 1 July 2025 start date approaching, now is the time for proactive planning. Whether it’s reviewing your super balance, assessing property exposure within your fund, or exploring investment alternatives, taking action early can help minimise risk and protect your future income.

If you’re considering property as part of your superannuation strategy, BuyerAgentFinder.com.au can help you connect with experienced buyer’s agents who understand the changing regulatory environment and can guide you through your options.