Property investors brace for new super tax squeeze

·25 min·2 clips

Stuart Williams reveals why the new super tax policy is a sensible move away from being a tax haven.

This episode of The Money Puzzle focuses on Australia's newly settled superannuation tax changes and their specific impact on property investors. Host James Kirby is joined by property and finance expert Stuart Wemyss to analyze the reforms. The discussion centers on how the revised policy alters the investment landscape for individuals using self-managed super funds (SMSFs) to hold property. From July 1 next year, earnings on super balances above $3 million will be taxed at 30%, doubling the previous 15% rate. The policy introduces a progressive tax structure, with a 40% rate applying to balances exceeding $10 million. A crucial revision from earlier proposals is that the tax now applies only to realized capital gains and investment income, not unrealized gains. Stuart Wemyss argues this change is particularly important for property investors, who often hold assets long-term before selling. Wemyss notes the consultation process led to a more sensible policy, moving away from super being a "tax haven." He calculates that even with a $5 million balance, the average tax rate in retirement is about 15%. For property income from assets within super above the $3 million threshold, the tax on that portion will indeed double. However, Wemyss emphasizes that super remains concessionally taxed compared to holding assets personally, in a company, or within a family trust. A surprising insight is that the changes might inject more heat into the upper-end residential property market. The theory is that individuals with very high super balances may pull money out to upgrade their family home, which remains capital gains tax-exempt. The hosts also dissect Melbourne's property market, noting its anomalously low prices compared to other capitals despite strong population growth fundamentals. Wemyss highlights how the First Home Guarantee scheme could artificially pull median dwelling prices down by increasing transactions below the price cap. The tone is conversational and educational, blending policy explanation with practical investment analysis. Listeners receive clear guidance, such as the advice not to make financial moves based on proposed laws until they are enacted. This episode is ideal for Australian property investors, SMSF trustees, and anyone seeking clarity on how the super tax changes affect real-world investment strategy. Listeners with minimal super balances or no interest in Australian tax policy might find the detailed discussion less relevant.

As heard by us

A practical super tax discussion that links policy changes to property and investor decisions.

James Kirby and Stuart Weems keep the super tax debate practical, tying the 30% tax on earnings in super above $3 million to property, investor choices, and the pressure points that may follow once the rules land.

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Want the super tax explained through property investors, not headlines?

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