Farmers celebrate super tax scrapping

The federal government will scrap planned taxes on unrealised capital gains on superannuation, a move that TasFarmers president Ian Sauer previously described as “legalised theft”.

Instead, superannuation accounts with balances between $3m and $10m would be slapped with a 30 per cent tax – double the standard rate.

Accounts with more than $10m will be taxed at 40 per cent.

Both rates will be indexed and the changes will take effect on July 1, 2026.

Around 800,000 Australians, which represents 0.5 per cent of the population, currently have superannuation balances above $10m.

TasFarmers and the state government have been opposed to the planned taxes on realised capital gains since they were first announced.

“Taxing unrealised gains was nothing short of legalised theft,” Mr Sauer said.

“This wasn’t just a policy tweak; it was a new tax regime.

“The notion of taxing unrealised gains before an asset is even sold goes against every principle of good policy and economic logic.

“We were one of the first to call this out, and we didn’t let it go.”

Mr Sauer said the original proposal would have forced some farmers to sell assets to pay tax on gains they had not realised.

“This outcome proves that advocacy works, but we can’t stop here.

“Policy must be built on fairness and consultation, not sprung on people without warning.

“We would urge the government to, when making policy decisions, engage with the people it’s going to impact most.”

The federal government's reversal was also welcomed by the National Farmers Federation, with its president, David Jochinke, saying the plans would have had serious unintended consequences for thousands of family farms and small businesses that hold property in self-managed superannuation funds as part of their succession plans.

“This is a monumental win for farmers, small businesses and commonsense,” Mr Jochinke said.

“From the beginning, we’ve said this policy of taxing unrealised gains risked family farm businesses.

“The government has listened and we thank them for that.

“Farmers can now plan for the future with confidence, knowing their hard work and succession plans are safe from this unfair tax.”