Lyn Formica
Head of Education & Content
- Transfer balance cap increases to $2.1m on 1 July 2026 (as legislated).
- Contribution caps rise from 1 July 2026 (as legislated), including updated bring-forward thresholds
- Division 296 and payday super are still scheduled to commence on 1 July 2026; LRBAs were not targeted in this Budget.
The 2026/27 Federal Budget was largely quiet on super. For SMSF professionals, the key takeaway is what didn’t change: major super settings already legislated (caps, Division 296 commencement and payday super timing) remain on track, and there was no new Budget-driven tightening for SMSFs.
What didn’t change for super and SMSFs in 2026/27 (already legislated settings)
No changes to the transfer balance cap
The general transfer balance cap will increase to $2.1m on 1 July 2026 as legislated.
No changes to contribution caps
The concessional contributions cap will increase to $32,500 on 1 July 2026 as legislated.
This means the non-concessional contributions cap will increase to $130,000 (4 times the concessional cap) from 1 July 2026.
Our earlier blog Implications of the increase in contribution caps from 1 July 2026 sets out the new bring forward thresholds for 2026/27.
Note, there was no change to the CGT small business concessions and relevant individuals remain eligible to make a contribution to super and elect to have it counted towards their “CGT cap” instead of their non-concessional contribution cap. However, the proposed future removal of the 50% CGT discount for some taxpayers may impact the amount which can be claimed under the CGT small business concessions (and therefore contributed to super).
No changes to how super funds are taxed
As mentioned in Meg’s blog, the Government has proposed changes to the way capital gains are calculated and the introduction of a minimum 30% tax rate on capital gains. These changes do not apply to super funds including SMSFs. This means super funds will continue to be eligible for a 1/3rd CGT discount for assets held for at least 12 months.
The new minimum 30% tax rate on the taxable income of discretionary trusts will also not apply to complying superannuation funds.
No changes to Division 296 tax
Division 296 tax, the new tax for individuals with more than $3m in super, will commence on 1 July 2026 as legislated. We are still awaiting the release of the final regulations – these regulations will detail how Div 296 tax will apply following the death of a member (amongst other things).
LRBAs live to see another day
Whilst the Government is proposing changes to negative gearing & established residential properties, there was no mention of restricting the ability for SMSFs to borrow to invest in property via a limited recourse borrowing arrangement.
No changes to Payday super
Payday super will commence on 1 July 2026 as legislated. In addition, earlier in the week, the Senate Economic Legislation Committee completed their report into the accompanying payday super regulations and did not recommend any changes at this stage. This means we are all systems go for 1 July 2026. You can read more about the implications for SMSFs here.
Still no relaxation of the SMSF residency rules
We continue to await a relaxation of the residency requirements for SMSFs. A number of years ago, the Government affirmed its commitment to extending the safe harbour rule for the central management and control test from two to five years and removing the active member test, but draft legislation has yet to be introduced.
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This article is for general information only. It does not constitute financial product advice and has been prepared without taking into account any individual’s personal objectives, situation or needs. It is not intended to be a complete summary of the issues and should not be relied upon without seeking advice specific to your circumstances.
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