The government has confirmed several important changes to the Division 296 proposed superannuation tax reforms. The updated measures aim to improve fairness while reducing the administrative burden and unintended impacts of the original proposal.

We’ve summarised the key updates and the practical steps you can take to prepare.

Key changes announced

Tax to apply only to realised earnings

The government has scrapped its plan to tax unrealised capital gains on super balances above $3m. The revised proposal will now apply only to future realised earnings, addressing major concerns about fairness and liquidity raised by tax professionals and fund managers.

Indexation of the $3m threshold

The $3m threshold will now be indexed in line with other superannuation limits. This change ensures that inflation and market growth do not gradually push more Australians into the higher tax bracket over time.

New $10m tier introduced

A second tax threshold of $10m will be introduced which will create a more progressive structure. Earnings between $3m and $10m will be taxed at 30%, while earnings above $10m will attract a 40% rate. Both thresholds will be indexed.

Implementation delayed until 1 July 2026

The introduction of the new tax has been delayed by one year, giving super funds, advisors, and affected members additional time to prepare. This adjustment also reduces the short-term impact on the federal budget.

Defined benefit pensions to be included

The revised design will ensure the new tax also applies to defined benefit pensions, maintaining consistency and fairness across different types of superannuation interests.

Boost for low-income earners

The Low Income Super Tax Offset (LISTO) will rise from $500 to $810, and the income eligibility threshold will increase from $37,000 to $45,000 from 1 July 2027. These changes will benefit an estimated 1.3m Australians, particularly women and part-time workers, helping them grow stronger retirement savings.

Budget impact of the reforms

Treasurer Chalmers confirmed the refinements will cost around $4.2bn over the forward estimates, mainly due to the one-year delay in implementation. He said the reforms “maintain the concessional treatment of superannuation, but ensure it is provided in a more equitable and sustainable way.”

How SW can help 

Our superannuation and tax specialists can help you understand how these changes may affect your personal or business super strategy. 

We can:

• review your super balance and investment mix to assess future tax exposure
• identify planning opportunities to manage contributions and withdrawals
• advise on the best way to structure your super for long-term efficiency and compliance.

These reforms will evolve as legislation progresses, so early planning is key. Contact your SW advisor to discuss how the new thresholds and timing changes could affect your retirement strategy.

Contributor

Julia Lee

The post Superannuation changes to Division 296 tax appeared first on SW Accountants & Advisors.

This article outlines the key changes, with commentary on practical implications, compliance requirements, and planning considerations for clients and advisors alike.

The Bill and accompanying Explanatory Memorandum provide more information on the changes discussed below.

Extension to Off-the-Plan (OTP) Stamp Duty Concession

The current OTP concession has been extended again for eligible contracts entered into on or before 21 October 2026. The concession reduces the stamp duty payable by deducting construction costs from the sale price when determining the duty liability. The concession can result in substantial stamp duty saving for the buyer.

The extension provides continued relief for buyers (home owners and investors) of newly built apartments, townhouses and units and will reduce upfront costs to make property more affordable and support housing supply growth with the encouragement of pre-sales.

As the extension is again temporary, rather than the introduction of a permanent concession, developers and advisers should encourage eligible purchases to act before the deadline of 21 October 2026.

For further information on this exemption, please refer to our previous update: New temporary off-the-plan duty concession – SW Accountants & Advisors

Land Tax Exemption for Family Violence Victim-Survivors

Individuals who flee their principal place of residence (PPR) due to family violence may now:

• Receive a land tax exemption for up to 6 years, and
• Requalify for first home buyer benefits under the Duties Act if they purchase a new home.

This reform helps prevent victim-survivors from losing critical concessions during an already traumatic life event. It recognises the economic vulnerability caused by displacement and aims to provide a financial safety net.

Advisors should ensure clients are aware of this exemption and support them in assembling evidence (e.g. intervention orders, police reports) to substantiate claims. It’s a rare intersection of social policy and taxation.

Build-to-Rent (BTR) Concessions – Expanded compliance Obligations

Victoria’s BTR regime continues to evolve, with tightened rules to further uphold the intended purpose of the concession. The key changes introduced by the Bill include:

• Genuine 3-Year Lease Offer: BTR developers must offer tenants a lease of at least 3 years. If a shorter lease is accepted, a declaration signed by both parties must confirm the longer lease was offered.
• 12-Month Lease Minimum: Short-term leases (<12 months) are prohibited from 1 January 2026, except where they follow on from a long-term lease (e.g. as an extension).
• Commissioner’s Discretion: If a property is temporarily uninhabitable (e.g. due to renovation, disaster), the Commissioner may disregard this period when assessing eligibility for BTR benefits.

These provisions are designed to enforce the long-term housing intent of the BTR regime and avoid exploitation via serviced apartments or short-term rentals. Requiring signed declarations ensures the 3-year offer is not a token gesture.

The prohibition on short leases supports stable tenancies but may reduce flexibility in tenant arrangements. BTR operators must ensure their internal processes capture offers, declarations, and tenancy records. Failure to document properly could jeopardise eligibility for land tax concessions.

The Commissioner’s discretion on uninhabitable periods provides welcome relief, offering flexibility in genuine cases of vacancy due to repairs or emergencies. However, expect the SRO to require detailed evidence for such claims.

CIPT Reforms

The Commercial and Industrial Property Tax (CIPT) regime introduced in 2024 has been updated, with reforms focused on clarity and integrity. The key changes include:

• Provisional Use Assessment: Where land lacks an Australian Valuation Property Classification Code (AVPCC), the Commissioner may provisionally determine whether it qualifies for CIPT based on actual use.
• Valuations for Non-Rateable Land: The Commissioner may now request a formal valuation from the Valuer-General for non-rateable or non-leviable land.
• Subdivision Clawback: If a parent lot enters CIPT as a partial transaction, and is subdivided within 3 years, duty will apply to purchases of child lots.

The ability to determine qualifying use without relying on AVPCCs removes administrative bottlenecks, particularly for new developments or rezoned land. Requesting VGV valuations ensures the regime can’t be sidestepped by holding land outside typical local government frameworks (e.g. charities or Crown leases). These stakeholders should re-evaluate holdings for CIPT exposure.

Finally, the subdivision clawback is a targeted anti-avoidance measure. Developers can no longer rely on staging subdivisions to defer or avoid duty once land is partially transitioned into CIPT. It underscores the need for comprehensive structuring advice from project inception.

Trustee Notification Requirements Simplified

Trustees are now only required to notify the SRO of land transactions where:

• they cease to hold land as trustee and acquire it personally, or
• they change the trust under which they hold the same land.

This significantly reduces red tape for routine changes, such as retiring/resigning trustees or administrative changes within a trust and isa change that aligns with practical trustee conduct. However, proper documentation still remains essential when changing the trust deed or transferring beneficial ownership, as these changes may still trigger duty or other tax consequences.

Penalty Tax for Recklessness

An amendment to the Taxation Administration Act 1997 (Vic) introduces a 50% penalty tax for recklessness by a taxpayer or a person acting on their behalf in respect of the taxpayer’s obligations. These penalties will be issued in respect of tax default and notification defaults.

The new penalty level signals that the State Revenue Office will adopt a firmer stance on non-compliance that stems from recklessness. This therefore underscores the importance of:

• Diligent Compliance: Ensuring that all tax obligations are met with due care an attention.
• Professional Advice: Seeking guidance from qualified tax professionals when uncertain about tax positions or obligations.
• Documentation: Maintaining thorough records of decisions and advice received to demonstrate the basis for tax positions taken.

How SW can help

At SW, our property and stamp duty experts can provide analysis and advice around the changes introduced in the Bill and identify the impacts that they can have for you.

Please contact our SW advisors for more information on how the changes may impact you.

Key contacts

William Zhang – Associate Director, Tax
Blake Trad – Consultant, Tax

The post Victoria’s State Tax Reform 2025: What Property Owners, Developers & Advisors Need to Know appeared first on SW Accountants & Advisors.

Whilst the important details of the framework have yet to be released (and remain the subject of an intended consultation process), the Albanese Government’s intention is to “to ensure multinationals pay their fair share of tax“.

The Government plans to do this via 4 major areas of reform or expansion:

1. implementation of BEPS 2.0
2. modification of thin capitalisation rules
3. restricting Intellectual Property deductions, and
4. expanding Tax Transparency measures, including requiring:
   • public release of Country-by-Country (“CbC”) information
   • a public registry of ultimate beneficial ownership of entities
   • mandatory reporting of “tax haven exposure”, and
   • transparency requirements for Australian government tenderers.

Adoption of BEPS 2.0

The ALP has confirmed its commitment to the timely implementation of the Base Erosion and Profit Shifting framework (BEPS 2.0) to follow through on Australia’s agreement to the global arrangement reached in October 2021 and membership of the OECD’s Inclusive Framework.

This will include the domestic implementation of what is known as a 2-Pillar solution, which includes:

• a global minimum effective minimum corporate tax rate set at 15% for multi-nationals, and
• a fairer distribution of profits by multinationals.

The new Government is clearly hoping that the introduction of these measures will increase Australia’s proportion of the tax take on many multinationals.

Thin capitalisation reform

The ALP is proposing to further limit interest deductions to bring Australia in line with the OECD recommended approach. In particular, the Government is proposing to limit interest deductions to 30% of EBITDA from 1 July 2023, while retaining the arm’s length and worldwide gearing debt tests.

The proposed reform is simple in statement but difficult in execution, and will likely have significant impact on a range of sectors that are traditionally highly leveraged and increase the compliance burden for many multinationals.

Thankfully, the ALP has stated that these reforms will only proceed after industry consultation, and we hope that due consideration is given to the broader implications of such a change.

Intellectual Property restrictions

The Government has seemingly sought to ‘borrow’ certain integrity measures from other tax systems such as the UK and US in seeking to deny tax deductions for the use of intellectual property when those payments are paid to a tax haven jurisdiction.

These measures are intended to only apply to Significant Global Entities (SGEs) and are intended to stop “treaty shopping”. The Government intends to introduce provisions that would deny such a payment unless it could be substantiated that the royalty payment was not for the dominant purpose of avoiding Australian tax.

There are many complexities evident with this proposal, not the least the interaction of these proposed rules with existing tax provisions such as Part IVA and Diverted Profits Tax.

Tax Transparency expansion

The remainder of the ALP’s reform agenda is focused on expanding requirements for multinationals to be transparent in their dealings.

These expansions focus on 4 areas:

Public reporting of CbC information

It is currently only mandatory to provide CbC Reporting information to the ATO. The ATO then shares that information with certain other global revenue authorities.

The ALP intends to require “large multinational firms” (presumably SGEs) to publicly disclose the CbC information.

Ultimate beneficial ownership information

The Government intends to create and maintain a public registry of ultimate beneficial ownership. Ultimate beneficial ownership is essentially the identity of who ultimately owns, controls, or receives profits from a company or other type of entity.

Implementation of a public register of such information will bring Australia in line with other G20 nations such as Canada, UK, and the US.

We expect that such a register would be limited in scope to large multinationals given the broader context of the reform agenda. However, limited information has been provided at this stage.

Mandatory reporting of “tax haven exposure”

Presumably tied to the implementation of BEPS 2.0, these changes will require multinationals operating in jurisdictions below the proposed global minimum 15% tax rate to disclosure a “material tax risk” to shareholders.

Tax transparency requirements for Australian Government tenderers

Lastly the ALP plan to implement a “Fair Go Procurement Framework” requiring companies tendering for Government contracts worth more than $200,000 to disclose their country of domicile for tax purposes.

ALP plan needs broad consultation

The ALP’s proposals clearly represent a significant pivot from policies in previous elections and have generally focused on ways of addressing tax avoidance by multinational corporations. Whilst they may provide some headaches and uncertainties for taxpayers, they are unlikely to unsettle Australian voters or mums and dads.

Nonetheless, the potential application of the reforms are significant and may impact many small and medium sized enterprises – as well as the SGEs. We welcome the opportunity for broad consultation to ensure that the plan achieves its objectives in an appropriate and measured way.

Contributors

Jae Debrincat

The post How will multinationals “pay their fair share” under the new Government? appeared first on SW Accountants & Advisors.