Australia’s 2026–27 financial year brings important changes to contribution limits, large-balance super taxation, employer super payments and SMSF borrowing.
Separate tax reforms affecting negative gearing and capital gains begin on 1 July 2027, while a minimum tax for discretionary trusts is proposed from 1 July 2028.
Why the Timeline Matters
Not every reform starts at the same time.
This guide separates rules that already apply in 2026–27 from changes scheduled for 1 July 2027 and proposals intended for 1 July 2028.
That distinction is important before changing contribution, investment or business structures.
1. Key Superannuation Numbers at a Glance
Concessional Contributions Cap
2025–26: $30,000
2026–27: $32,500
The higher cap provides more room for Super Guarantee contributions, salary sacrifice and deductible personal contributions, subject to your individual circumstances.
Non-Concessional Contributions Cap
2025–26: $120,000
2026–27: $130,000
Eligible individuals may have a higher annual limit for after-tax contributions.
Bring-Forward Maximum
2025–26: $360,000
2026–27: Up to $390,000
Eligible people may access up to three years of non-concessional contribution caps. Eligibility depends on factors including age and total super balance.
Super Guarantee Rate
2025–26: 12%
2026–27: 12%
The Super Guarantee rate remains at 12%, although Payday Super changes when employers are required to make payments.
General Transfer Balance Cap
2025–26: $2.0 million
2026–27: $2.1 million
The general transfer balance cap increases to $2.1 million. An individual’s personal transfer balance cap may differ depending on their previous retirement-phase usage.
Important: Contribution caps are not automatic entitlements. Bring-forward access, carry-forward concessional contributions and the ability to make non-concessional contributions depend on eligibility rules and your total super balance.
2. Investment Tax Changes: What Starts Later
A major weakness in many summaries of the 2026 reforms is that they combine changes with different commencement dates.
The following reforms should therefore be considered separately.
Negative Gearing for Residential Property
From 1 July 2027
For established residential property acquired after 7:30pm AEST on 12 May 2026, losses from 1 July 2027 generally cannot be deducted against salary or other non-residential income.
Those losses can be used against other residential-property income, including relevant capital gains, and excess losses may be carried forward.
Properties held before the announcement are protected, while eligible new builds can continue to be negatively geared.
Capital Gains Tax Changes
From 1 July 2027
For Australian resident individuals and trusts, the existing 50% CGT discount is replaced prospectively by indexation of the cost base for post-1 July 2027 gains, together with a 30% minimum tax rate on real capital gains.
Pre-1 July 2027 gains retain the previous treatment.
New-build investors can choose between the existing 50% discount and the new rules, subject to the legislation.
Existing small-business CGT concessions remain available where eligibility requirements are met.
Minimum Tax on Discretionary Trusts
Proposed from 1 July 2028
The Government intends to introduce a 30% minimum tax for discretionary trusts from 1 July 2028.
As at 22 September 2026, this measure remains in the legislative development process. Exposure draft legislation was released on 3 September 2026.
Proposed exclusions and restructuring options mean the final impact will depend on the legislation ultimately enacted.
There Is No Universal “Best” Investment Structure
Personal ownership, trusts and superannuation can produce very different tax outcomes depending on the asset, investor, retirement phase, contribution rules, borrowing restrictions and future plans.
Headline tax rates alone are not enough to determine whether an SMSF or another investment structure is appropriate.
3. SMSF Property Borrowing: LRBA Rules From 10 August 2026
Schedule 5 of the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 commenced on 10 August 2026.
For affected new limited recourse borrowing arrangements, or LRBAs, real property acquired under the arrangement must be business real property within the meaning of superannuation law.
The key points are:
- New arrangements: The restriction applies to borrowing arrangements entered into on or after 10 August 2026.
- Pre-commencement arrangements: Borrowing arrangements entered into before commencement can continue to fall within transitional protection.
- Refinancing: Refinancing a borrowing that was entered into before commencement is specifically protected by the transitional rules.
- Existing acquisition arrangements: Protection can also apply where the related asset is acquired under an arrangement entered into before commencement, even if settlement occurs later.
Practical point: Do not rely only on a contract date when deciding whether an LRBA is grandfathered. The legislation uses the concept of an “arrangement entered into”, so the facts and supporting documentation should be reviewed before proceeding.
4. Division 296: Additional Tax for Higher Super Balances
Division 296 applies from the 2026–27 income year.
It creates an additional individual tax liability on a proportion of superannuation earnings where a person’s total superannuation balance, or TSB, measured under the statutory rules, exceeds the relevant threshold.
Total Super Balance Up to $3 Million
No Division 296 tax applies.
Ordinary super fund tax rules continue to operate.
Total Super Balance Above $3 Million
A 15% Division 296 tax applies to the person’s taxable superannuation earnings — broadly, the relevant proportion of statutory superannuation earnings attributable above the $3 million threshold.
Total Super Balance Above $10 Million
The 15% amount above continues to apply, plus an additional 10% on the person’s very large superannuation balance earnings component attributable above the $10 million threshold.
Why “30% or 40% on Your Super” Is Misleading
Division 296 is not a flat 30% or 40% tax on the entire super balance.
The additional tax is calculated using statutory earnings and proportion formulas.
The fund may already pay tax under the ordinary super rules, but the Division 296 liability is assessed separately to the individual.
Simplified Division 296 Illustration
Assume, purely for illustration, that the TSB reference amount is $11.5 million and total superannuation earnings under the Division 296 rules are $500,000.
Ignoring special adjustments and exemptions:
Taxable superannuation earnings
($11.5m − $3m) ÷ $11.5m = 73.91% of $500,000
Amount: $369,565
Very large balance earnings component
($11.5m − $10m) ÷ $11.5m = 13.04% of $500,000
Amount: $65,217
Illustrative Division 296 tax
15% of $369,565 + 10% of $65,217
Approximate amount: $61,957
This is a simplified mathematical illustration, not a personal tax estimate.
Actual Division 296 earnings can differ materially because the legislation contains detailed rules for different super interests, contributions, withdrawals, pension income and defined benefits.
5. Payday Super: What Employers Must Know
12% of Qualifying Earnings
From 1 July 2026, Super Guarantee is calculated as 12% of qualifying earnings, a statutory concept that includes ordinary time earnings and other specified payments.
Payment Timing
Employers must pay super on payday and, generally, have the payment received by the employee’s fund within seven business days.
Extended timeframes can apply in limited circumstances.
Payroll and STP
Payroll products need to support Payday Super and Single Touch Payroll reporting updates.
Employers should confirm that their software is configured correctly and ensure rejected payments are resolved quickly.
The ATO Small Business Superannuation Clearing House also closed from 1 July 2026. Employers who previously used it need an alternative SuperStream-compliant payment solution.
6. What Business Owners and SMSF Trustees Should Review Now
1. Check Contribution Headroom
Review concessional and non-concessional contributions already made across all funds before increasing salary sacrifice or personal contributions.
Confirm carry-forward or bring-forward eligibility rather than assuming the headline contribution cap is available.
2. Review High-Balance Exposure
If your total super balance is near or above $3 million, model the Division 296 position using the statutory rules and current fund data.
Balances above $10 million require additional consideration.
3. Review SMSF Property Documents Before Borrowing
For new LRBA property acquisitions, confirm whether the property and the timing of the arrangement satisfy the post-10 August 2026 rules.
Do not rely on a generic “grandfathered” label without reviewing the relevant documents.
4. Test Payroll for Payday Super
Confirm that your payroll and super payment process is working under the 12% qualifying earnings rules.
Contribution timing should be checked, rejected payments should be monitored, and the business should no longer depend on the closed Small Business Superannuation Clearing House.
5. Separate 2027 and 2028 Planning From Current Law
Negative gearing and CGT reforms apply from 1 July 2027.
The discretionary trust minimum tax is intended to apply from 1 July 2028 but, as at the date of this article, is still being finalised.
Businesses and investors should plan ahead while clearly distinguishing enacted law from proposals.
Need Help Preparing for 2026–27?
Review the Rules Before They Become a Compliance Problem
Procentax can help with SMSF tax and compliance, contribution planning, LRBA documentation reviews, Division 296 impact modelling, payroll transition and business tax planning.
Advice should be tailored to your circumstances, financial position and legal obligations.
Book a consultation:
Phone: 02 9423 3663
Email: Bpo@procentax.com.au
Website: procentax.com.au