Australia's self-managed super sector was widely tipped to cool once the Division 296 tax on large balances edged closer to reality. The numbers tell a different story. Just over 12,000 funds (12,264) were established in the June 2026 quarter alone, according to Australian Taxation Office data, keeping new establishments near record levels. As the measure begins to bite, it is worth understanding why so many Australians are still signing up.

Establishments are holding at record highs

The pace of new fund creation has barely flinched. ATO figures show the number of SMSFs rose by 47,000 over the year ended 30 June 2026, lifting the sector to roughly 680,000 funds and 1.24 million members.

Research covering the six months to 31 December 2025 found that Millennials and Gen X together accounted for 90.3% of new establishments. In other words, the growth is being driven overwhelmingly by younger Australians who are years, sometimes decades, from the balances Division 296 targets.

Why the tax touches few new trustees

Much of the earlier anxiety related to a 2023 proposal that has since been reshaped. The version now legislated applies from the 2026–27 income year, with the first assessment at 30 June 2027.

Under the enacted law there are two thresholds, both indexed to inflation: a $3 million large balance threshold and a $10 million very large balance threshold. Earnings attributable to the band between $3 million and $10 million are effectively taxed at 30%, and earnings above $10 million at 40%. Crucially, the revised model removed the taxation of unrealised capital gains that featured in the original proposal, so only realised earnings are captured.

For a Trustee with a balance well under $3 million, the practical effect is limited. Because the thresholds are indexed, the legislation is also designed to avoid quietly dragging more people in as Inflation lifts nominal balances over time.

What the latest data shows about new trustees

The profile of who is joining explains a lot. Research shows the average age of a new trustee is 47, compared with 61 for existing trustees. ATO data shows those aged under 50 account for nearly 70% of new SMSFs, and the 35–44 group is now the single largest demographic entering the sector.

Members at that stage of life are typically still accumulating, not sitting on multi-million-dollar balances. That helps explain why a tax aimed at the largest accounts has done little to deter people whose balances are far below the thresholds. With the first assessment not due until 30 June 2027, the measure also remains some distance off for those who are affected, giving the sector room to keep expanding in the meantime.

For many, the motivation appears to be control rather than tax. As one industry association executive put it: for anyone under 50 in the workforce, compulsory Superannuation has been a constant throughout their working life. That familiarity may be feeding a desire to take the wheel.

What trustees may wish to consider

Running an SMSF still carries real responsibilities regardless of balance size. Trustees must meet the sole purpose test, prepare an Investment strategy, keep records and arrange an annual independent audit, and they remain personally responsible for compliance.

For those approaching or above the $3 million mark, the timing and mechanics of Division 296 could Warrant closer attention, including how the assessment is made to the individual and the option to have the amount released from the fund. Whether an SMSF suits any particular person depends on individual circumstances, and professional advice may be appropriate.