Super tax changes could impact high-income Australians
Proposed changes to Australia’s superannuation tax framework are beginning to attract closer attention from high-income households, particularly those with substantial assets inside self-managed super funds.
While the reforms are still in draft form, they raise important considerations for property owners and investors in premium markets such as Mosman, Neutral Bay and Cremorne.
From 1 July 2026, the federal government plans to increase the tax on superannuation earnings for balances above $3 million. Under the proposal, earnings on amounts exceeding
that threshold would be taxed at 30% instead of 15%, with even higher rates applying to very large balances.
Although the number of people directly affected is relatively small, the profile of those impacted is significant. Many are established professionals or retirees with diversified portfolios that often include property held within super.
For some investors, the change could alter how property fits into their longer-term strategy. Higher tax on realised earnings inside super, including rental income and capital gains, may reduce the appeal of transferring property sale proceeds into super if it pushes balances beyond the new limits. In practical terms, this could encourage some owners to retain property assets for longer, particularly in tightly held, blue-chip suburbs where quality stock is already scarce.
There may also be implications for lending. For older Australians who use superannuation income to help service loans, banks could take a more conservative view if after-tax super income is reduced under the new rules. While this is unlikely to materially change borrowing capacity, it may marginally affect how lenders assess income for certain borrowers, especially those upgrading or refinancing later in life.
Importantly, these changes are not expected to influence younger or lower-income buyers. Adjustments to super concessions for lower-income earners sit well outside the demographics active in Sydney’s prestige property markets and are unlikely to affect purchasing behaviour locally.
What matters most for property owners in Mosman and surrounding suburbs is understanding how tax, lending and asset structure intersect. Superannuation reform is another reminder that property decisions do not sit in isolation. They form part of a broader financial picture that includes retirement planning, liquidity, borrowing flexibility and long-term family goals.
While the final detail may change, larger super balances are clearly becoming a focus for policymakers, making it sensible for property owners to think about how this fits into future plans.