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Senate poised to pass super tax reform as Greens push $2m threshold

The plan will double tax on earnings above $3m to 30% from July; raise $2.7bn in its first year; prompt warnings from farmers, SMSF holders, MPs about cash flow strains caused by annual levies.

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Overview

  • The Greens have agreed to support the bill only if the threshold is lowered to $2m with annual indexation to curb bracket creep
  • From July 1, superannuation earnings over $3m will be taxed at 30%, up from 15%, affecting roughly 80,000 high‐balance accounts
  • Treasury projects the measure will generate $2.7bn in its first full year of operation
  • Federal politicians and public servants in defined benefit schemes can defer payment until retirement under draft regulations
  • Farmers and owners of self‐managed super funds warn that annual levies on unrealised gains will create cash flow challenges