On July 1, 2025, a new tax will come into effect targeting Australians with over $3 million in superannuation. Under the new rules, earnings on super balances above the $3 million mark will be taxed at an additional 15% — bringing the total tax rate to 30% on that portion.
The controversial part? The tax includes unrealised gains.
That means Australians could be taxed on paper increases in the value of their superannuation — even if they haven’t actually sold any assets or received a dollar in income. For those with property, private investments, or other illiquid assets in their SMSF, that creates a real problem.
The government says it’s about fairness — cracking down on “excessive” tax concessions for the wealthy. But from the response we’ve seen, that narrative doesn’t stack up.
A few days ago, we shared the community's take in The $3 million super tax is coming — and accountants are furious and followed it up with a post on LinkedIn. What followed was a flood of feedback from across the profession: accountants, advisers, small business owners, and SMSF experts — all weighing in on what this tax actually means in practice.
This blog is a deeper look at that reaction. And it reveals a much bigger problem:
the policy design itself — and the growing disconnect between government decision-makers and the real-world impact of their choices.
This is what happens when policy is made in a bubble
One thing came through loud and clear: the people who created this tax don’t understand how money moves through everyday Australians’ lives. They don’t get what it takes to grow a business, manage retirement savings, or navigate a volatile property market.
Accountants aren’t angry just because there’s a new rule to follow. They’re angry because the rules make no sense. And they’re the ones who have to explain it to clients who are about to be blindsided.
One commenter summed it up best:
“Feels like a policy designed without thinking about how it actually plays out.”
Another added:
“Us accountants are the ones that will receive the backlash from clients… once again the government have not thought through a policy.”
That’s not political noise — that’s professionals calling out a policy failure in real time.
Taxing money that doesn’t exist yet
The core issue is taxing unrealised gains. You’re not being taxed on cash you’ve received. You’re being taxed on a valuation. On a number on paper. And in volatile markets — like property, shares, or crypto — that number can swing wildly, year to year.
One tax agent pointed out the dangerous precedent:
“I can foresee this methodology being applied to real estate and crypto, regardless of the balance.”
Another added:
“You fall short, too bad.”
This isn’t how you build a stable, fair, or trusted tax system. This is how you create panic. Confusion. And bad financial decisions made under pressure.
What if the asset is illiquid?
Let’s talk about SMSFs with commercial property. Thousands of small business owners have used their super to buy their premises. They might be asset-rich, but they’re often cash-poor.
One adviser explained:
“We have plenty of small business owners that have built up their super balance to fund the purchase of their business premises… Now imagine your property is valued upwards by 10%. The SMSF doesn’t have the cash to pay the tax.”
So what happens next? Sell the property and cop CGT, stamp duty, and lost rental income? Or borrow against it and wear the interest? Either way, you’re haemorrhaging money.
Another commenter nailed it:
“They’re stuck between a rock and a hard place.”
It’s not just a tax problem. It’s a liquidity crisis created by design.
“High-income earners” today, everyone else tomorrow
Let’s not pretend the $3 million threshold is fixed. Policies like this always start with the so-called “wealthy”. But thresholds don’t adjust with inflation. Brackets stay frozen. And before long, average Australians get swept up too.
“These policies are always pitched as targeting high-income earners, but failure to adjust brackets means their impact creeps further down.”
We’ve seen this with income tax. With HECS. With family tax benefits. This will be no different. Anyone with a lifetime of diligent saving and smart investment could find themselves in the firing line.
The valuation problem no one’s addressed
Valuation methodology is another mess. What’s the basis? Market value? Actuarial assumptions? And who’s checking it?
One accountant called this out:
“The major problem is the basis of valuation… Legislation will have to be definitive or litigation will result.”
This isn’t minor. A badly executed valuation system creates massive uncertainty — for compliance, for advisers, for SMSF auditors. It could clog the AAT and courts with challenges. And for what?
Professionals are losing faith
The feedback wasn’t just technical — it was emotional. People are fed up.
“This is hideous.”“It’s a sh*t show.”“This is simply robbery.”“Pure greed in policy.”
Whether or not you agree with the tone, the message is clear: trust is eroding.
Even those who usually steer clear of policy debates are speaking up. It’s not because they’re political. It’s because they care about fairness. About consistency. About policies that don’t damage people who followed the rules.
A call for common sense
Policies like this need to be co-designed. Not dropped from the sky by people who’ve never run a business or managed client portfolios.
The government should have worked with tax agents, SMSF specialists, auditors, and wealth advisers to model the outcomes. They should have stress-tested the scenarios. They should have looked at long-term consequences. Instead, they rushed something out and left the profession to mop it up.
As I said in one reply:
“No matter what path clients take, there’s a cost waiting.”
And that cost is real — financially, emotionally, and structurally.
Final Word:
This isn’t just about taxing large balances. It’s about how badly disconnected policy-making has become. It’s about a government drafting laws without understanding the systems they’re interfering with — and doing it without engaging the people who have to implement them.
If this is the new standard for tax policy — rushed, vague, politically spun, and divorced from practical reality — we’re in trouble.
Because every time something like this is rolled out, there’s a group left behind to clean it all up.
And that group? It’s the accountants.
