Division 296 became law on 13 March 2026 and applies from the 2026-27 income year. The design that finally passed is not the one most articles describe. Unrealised gains were dropped, a second threshold at $10 million was added, and both thresholds are now indexed.
The first year Division 296 applies. For 2026-27 only, liability is worked out on your total super balance at 30 June 2027 alone.
Across all your funds, not just this one. For 2027-28 onwards, use the higher of the balance at the start and the end of the year.
Realised earnings attributed to your interest, not the movement in your balance. Broadly the fund’s taxable income, less assessable contributions, plus exempt current pension income. Your accountant works this out after the fund’s tax position is settled.
The original 2023 bills lapsed when the 47th Parliament ended on 21 July 2025. A redesigned measure was announced on 13 October 2025, introduced in February 2026, and received assent on 13 March 2026. A great deal of commentary still online describes the lapsed version.
| Original 2023 design (lapsed) | What became law | |
|---|---|---|
| Earnings basis | Unrealised, movement in your balance including paper gains | Realised, derived from the fund’s actual taxable income |
| Thresholds | One, at $3 million | Two, at $3 million and $10 million |
| Indexation | None | CPI indexed from 2027-28 |
| Start date | 1 July 2025 | 1 July 2026 |
If you have read that Division 296 taxes the growth in your property before you sell it, that was true of the lapsed design and is no longer the case. A property that simply appreciates does not generate a Division 296 bill.
It is a proportion of earnings, not a bracket on your balance. That distinction is the whole design.
Because the tax follows realised earnings, a member with $12 million and no realised income pays nothing, while a member with $4 million who sold a property that year can face a real bill. That is why this calculator asks for your earnings rather than guessing them from balance growth.
The liquidity problem is smaller than it was under the original design, but it has not gone away. A single sale can spike one year’s earnings and produce an assessment that is your personal liability, payable within 84 days of the notice. You can elect to release the money from super, but a fund holding one lumpy property may have little that is liquid.
Rent, interest, dividends and franking credits all still count every year, so a tenanted commercial property produces Division 296 earnings even in a year you sell nothing.
Small funds can elect to reset the cost base of all CGT assets to market value at the end of 30 June 2026, which keeps pre-1 July 2026 gains out of Division 296. It is all or nothing across every asset, it is irrevocable, and it must be made by the due date for lodging the fund’s 2026-27 return. Making that election well needs a defensible market value at 30 June 2026 for every property the fund holds.
The formula is implemented from the legislation, including the two decimal place rounding rule in sections 296-40(3) and 296-45(3), which is not cosmetic. It reproduces every published worked example we could find to the cent: the four ATO examples, an MLC example, and a two member SMSF example from Heffron. In the ATO’s two-tier example the rounding rule produces $64,585 where exact arithmetic would give $64,583.33, and this calculator returns $64,585.
The cost base reset election is only as good as the valuations behind it. Fixed fee, Australia wide, current or retrospective dates.
Order a valuationAsk a question firstThis calculator is general information, not financial or tax advice, and does not take your circumstances into account. Division 296 tax is a personal liability, is not deductible, and the earnings figure it depends on is not known until your fund’s tax position for the year is settled. Speak to your accountant before acting. Thresholds shown are those for 2026-27; they are indexed from 2027-28 and the indexed figures depend on CPI data not yet published.
