Farming Land $3M Super Shock
- Nijo Antony
- Sep 1
- 2 min read
The $3M Super Shock - Division 296, Farming Land & Unrealised Gains
From 1 July 2025, a significant tax change will affect members with more than $3 million in superannuation, who will face an additional 15% tax under Division 296, even on unrealised gains.
For SMSFs holding farmland, commercial property or long-held appreciating assets, this is a game-changer.
How the Division 296 Tax Works
The tax applies to the increase in your Total Super Balance (TSB), not income received.
It includes increases from asset revaluations, even if no sale occurs
Calculated at 15% on the proportion of TSB above $3 million.
Example: The Douglas SMSF The Douglas family's SMSF held $5.4M in farmland. In 2025–26, the land value rose by $900K — yet there were no sales. The fund's member received a Division 296 tax assessment for $135,000, despite having no liquid income to fund it.
Strategies to Reduce Exposure
Equalise member balances: Split contributions across spouses or children to keep each member under $3M
Withdraw excess balances strategically: Use rollbacks or lump sums before 1 July 2025
Move appreciating land into trusts: Future purchases may be better held in a Family Protection Trust.
Segment assets: Pension v accumulation pool can be managed to reduce effective earnings.
Legal Reference
This new tax is embedded in ITAA 1997 Division 296, and further clarified in the Treasury Laws Amendment (Better Targeted Superannuation Concessions) Bill 2023.
Checklist
Do any members in your SMSF exceed or are close to the $3M cap?
Are land and property values updated annually?
Do you have flexibility in how benefits are paid (lump sum, rollover, peisn't)?
This isn't a tax; it's a planning prompt. With the right strategy, you can limit exposure while continuing to grow your wealth.
If you would like assistance in developing a comprehensive succession plan tailored to your family's needs, please don't hesitate to get in touch.
Nijo Antony
Director
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