As you may be aware, Superannuation rules are shifting, and for property valuers, that shift has implications to practice. The proposed Division 296 tax, effective from 1 July 2025, may impose significant tax liabilities based on unrealised gains—an opportunity for valuers to guide and support property-heavy SMSF clients in NSW and the ACT. 

Legislative Disclaimer: Please note the Division 296 tax is currently proposed and has not yet been enacted into law. 

Items of Interest

  1. Division 296 applies before a property is sold Tax is set to apply to “unrealised gains” which refers to the increase in the value of property on paper, not just upon sale. This is unprecedented in Australian tax rules. The key date for the first calculation is 30 June 2026, using the balance at that time.
  2. Valuation accuracy = tax risk management  Therefore a reliance on valuations to determine tax liability. A precise, defensible valuation could reduce tax risk and protect clients from a cash-flow disaster. 
  3. Beware the liquidity trap Many SMSFs in NSW/ACT hold high-value property but have limited cash. If taxed on paper gains, the fund may struggle to raise cash, forcing asset sales, causing real-world losses.

Where Valuers Can Add Value

Role  Value You Add 
Annual valuation expert  Valuations on the 30 June feed directly into the 296 calculations. Keep methods transparent and conservative. 
Liquidity consultant  Warn trustees if rental income and reserves can’t cover potential tax liabilities, suggest cash buffers or other strategies.  
Strategic advisor 

 

 Support wider planning, e.g., transitioning high-growth assets into pension phase under super, or structuring contributions to limit exposure. 

Division 296 is more than a superannuation tax change—it’s a challenge that places valuers at the center of compliance, planning, and risk management. With property-based SMSFs in NSW and the ACT especially exposed, the accuracy and defensibility of valuations will directly influence trustees’ tax outcomes and financial wellbeing. 

How to prepare for the changes

  • Review valuation processes to ensure consistency, transparency, and robustness. 
  • Engage proactively with accountants, financial planners, and SMSF trustees to highlight valuation’s critical role in Division 296 planning. 
  • Position your expertise in guiding clients through potential liquidity traps, portfolio decisions, and future-proofing strategies. 

 

Further Reading on Division 296