May 1, 2025
Unrealised capital gains tax risks gutting SMSFs and investor confidence: expert warns
Taxing unrealised gains will change the way Australians invest, an industry executive has warned, as it would reduce the incentive to hold illiquid or high-risk assets.
Jamie Green, executive chairman of PrimaryMarkets, said this could happen across all investment vehicles if the tax is extended, not just super funds.
Green said if the Division 296 tax is passed under the next government, the mass withdrawal of money from super, especially from SMSFs, to stay under the $3 million threshold is a likely outcome.
“This, combined with the drying up of available risk capital, could leave Australia’s entrepreneurial ecosystem severely weakened,” he said.
The proposed tax on unrealised gains would set Australia apart globally, with no other major economy taxing unrealised gains in this fashion.
Green said the current proposal is aimed at normalising the idea of taxing unrealised gains, and once accepted within the super system, it will likely be expanded to cover all assets including shares, property, and private investments.
April 7, 2025
Policy change in super could destabilise Australia’s financial sector: RBA
An unexpected policy change allowing for the early withdrawal of super could have a detrimental effect on Australia’s economic stability, according to the RBA.
In its Financial Stability Review for April, the Reserve Bank of Australia says the superannuation sector has tended to support financial stability in the past, but it also has the potential to amplify stresses in the financial system in rare circumstances.
The review said that as the superannuation sector is now a large participant in key financial markets, liquidity challenges for the broader financial system could arise in the event of large shocks to the superannuation sector.
One scenario, the review said, could be where the sector was unexpectedly exposed to drains on liquidity, such as an unexpected policy change allowing additional member withdrawals in a crisis and payments related to foreign exchange hedges during a significant decline in Australian dollar at a time where selling securities to raise liquidity disrupted market functioning.
January 7, 2025
Vic SMSFs may get slugged with a raft of new taxes
SMSF trustees in Victoria are set to be hit with a raft of new taxes, a legal specialist has warned.
Daniel Butler, director of DBA Lawyers, said one of these new taxes is a substantial increase in the congestion levy which would greatly impact funds who may own commercial property in the CBD.
Butler said owners and operators of off-street car parking spaces in the Melbourne CBD and surrounding suburbs are liable to pay an annual congestion levy unless an exemption or concession applies.
“This is a real disaster for many seeking to rent commercial property as there are many commercial offices vacant and in some areas the vacancy rate is nearing 50 per cent, yet the Victorian government expects there is plenty of money to collect,” he said.
The congestion levy in Victoria is proposed to increase from this month with category 1, for spaces located in the CBD, rising from $1,750 to $3,030 and category 2, located in surrounding suburbs, from $1,240 to $2,150.
March 28, 2025
Div 296 bill officially lapsed
The election announcement this morning means that the controversial Division 296 tax has officially lapsed.
Peter Burgess, chief executive of the SMSF Association, said that with the Better Targeted Superannuation Bill failing to pass the Senate before the calling of the election this morning, it has now lapsed.
“Given the bill has not been passed, it means we do not need to rely on a Coalition government to repeal this legislation if they win the election,” Burgess said.
May 20, 2025
Arguments against $3m super tax inadvertently explain Labor’s refusal to budge
Despite pressure ramping up following its landslide election victory, Labor has maintained its stance on taxing unrealised capital gains through Division 296, and some of the critics might be making the Treasurer’s case for him.
The newfound obsession with the government’s $3 million super tax within mainstream media post-election is a testament to just how unexpected the scale of victory was.
All of the arguments taking aim at the proposed change, which would see concessional treatment of large super fund balances wound back, could have been made during the election campaign.
For many, it must have seemed like a waste of time when the bill seemed unable to get through the Senate in the last term. With Labor so widely tipped to either lose the election or be forced into a minority government, there was just no way Division 296 could pass.
