ns who manage their own superannuation may be forced to sell off property assets should Labor reach a deal with the Greens to double retirement taxes.
Anthony Albanese’s plan to double superannuation earnings taxes to 30 per cent for balances above $3million stalled last year.
But with Parliament back again for 2025, Labor could renegotiate a deal with the Greens and other left-leaning crossbench senators to punish retirement savers.
Labor’s Better Targeted Superannuation Concessions and Other Measures Bill 2023 also includes a radical provision to tax unrealised gains, where tax on the potential future profit from the sale of an asset is imposed even before it is sold.
This means ns with super balances above $3million may have to sell assets like property to avoid paying Labor’s proposed 30 per cent tax on earnings.
H&R Block’s director of tax communications Mark Chapman said this was creating uncertainty for those with a self-managed super funds.
‘Once we get to 1 July 2025, it is too late to plan mitigation,’ Mr Chapman told Daily Mail .
‘This is potentially a problem because the measure is not yet law – which makes it extremely difficult to plan.’
Mr Chapman said those with more than $3million in super may have to sell assets like property or farms to reduce the value of their self-managed super fund.
‘Possibly, yes. They might have to sell some of the SMSF’s assets and convert them to cash if they have balances over $3million in order to avoid a tax on unrealised gains on those assets,’ he said.
‘Or alternatively, we could see some valuation tricks being carried out such that the value of the funds assets comes out to be less than $3million. They therefore need to fully understand how the new tax is calculated and on what basis.
‘They will potentially be subject to capital gains tax on the surplus of the fund’s assets over $3million, even if the fund isn’t planning to sell those assets.’
The 1.2million ns who self-manage their super have until February 28 to lodge their annual tax return, with spouses able to be joint trustees of an account.
has 621,809 self-managed super funds, tax office data shows, but unlike the usual superannuation accounts, these ones allow up to six people to become members, which means many would surpass the $3 million threshold.
However Labor argues its plan to double earnings taxes on balances above $3million would only affect 0.5 per cent of retirement savers, or 80,000 people.
The Greens opposed Labor’s plan to double taxes on super earnings because they wanted the threshold for the 30 per cent tax rate to kick in at $1.9million with the extra tax revenue raised being used to boost social security payments.
This would affect 104,141 people or the top 0.6 per cent of super savers.
The Coalition is opposed to Labor’s super plan and One Nation is likely to vote with the Opposition should the legislation come before the Senate before Parliament is dissolved for the upcoming election, due by May.
The bill’s future rests with the Greens and left-leaning independent senators like Labor defector Fatima Payman and Tammy Tyrrell.
‘It’s very difficult to say as the crossbench has the ultimate power,’ Mr Chapman said.
Those lodging a self-managed super fund tax return have until February 28 if they are doing it on their own, but can get an extension to May 15 if they register with a tax agent.
An independent and approved SMSF auditor has to review the annual account before it is submitted to the n Taxation Office.
Those with a self-managed super fund face a maximum fine of $1,565 if they are late lodging their tax return, with a penalty of $313 for every 28 days it is overdue.