Australia's Treasurer Jim Chalmers has announced a significant change to the taxation of superannuation, aimed at high-income earners with superannuation balances exceeding $3 million.

This initiative is positioned as a key strategy for increasing government revenues during the Labor government’s second term in office.

Under the proposed legislation, superannuation holders with balances above the set threshold will face an additional tax of 15 percent on the annual value of unrealised capital gains accrued from assets held within their superannuation funds.

Intended to target the wealthiest Australians, this tax is designed to ensure that those with substantial financial resources contribute more to the tax system.

Current tax regulations stipulate that capital gains tax (CGT) is applied at a rate of 10 percent on the sale of certain assets, such as shares, property, and businesses.

According to tax experts, the new rules imply that superannuants will be subject to both the additional tax on unrealised gains as well as the existing capital gains tax upon the eventual sale of these assets.

Importantly, there will be no offset or credit available for the tax paid on unrealised gains when calculating the CGT liability.

This dual taxation approach has raised concerns among financial analysts and tax professionals, who warn that it could discourage investment and affect the overall growth of superannuation savings in Australia.

The proposed tax policy may also influence the investment strategies of self-managed superannuation funds (SMSFs), particularly for those with high-value portfolios.

The overarching aim of the policy is to address rising budget deficits and contribute to funding public services and social programs.

The Labor government has defended the necessity of increasing taxes on high earners as part of a broader commitment to economic equity and sustainability.