What changes are coming into effect 1 July 2025?
And what should investors pay attention to?
As we approach the end of the financial year, it is important for investors to keep their finger on the pulse of changing regulations and legislation that will impact their investments.
Below, you can find a list of the changes that are coming into effect on 1 July 2025, the investors it will impact and any considerations for your portfolio review.
Superannuation
Increase to the Super Guarantee (SG)
In 2021, the Super Guarantee increased from 9.5% to 10%, and the Federal Budget mandated that it would continue to increase by 0.5% each year until 2025. In the last mandated increase, the Super Guarantee will increase from 11.5% to 12% on 1 July 2025.
What this means for investors: During your Portfolio Review and planning for the next year, account for this increase in your superannuation. Be mindful if you are currently maximising your concessional contributions as there is no increase in the concessional contribution cap. If you do not adjust your salary sacrifice amounts, you may be liable for extra tax if you exceed your concessional contribution limit.
The 0.5% increase should also be accounted for in your financial goal review. The additional contributions will result in a higher retirement outcome.
Division 296 Tax on balances over $3 million
I’ve written a deep dive into the proposed Division 296 tax. It is set to be implemented from 1 July 2025. If it is not implemented by this date, it is likely it will be retroactively applied.
What this means for investors: The article goes through the potential impacts and how investors should prepare for the tax if they are impacted. These approaches include:
- Work with a tax professional to utilise losses where possible to offset gains
- Plan for liquidity needs now, especially if you hold illiquid assets. This may mean shifting asset allocation.
- Consider holding new contributions in cash to avoid unnecessary taxes or transaction costs.
- Use spousal contributions strategically to spread balances and reduce exposure above the cap.
Increase to Transfer Balance Cap
The Transfer Balance Cap stipulates how much an individual can have in the tax-free retirement phase in their superannuation pension account.
The balance is set to increase on 1 July 2025 from $1.9 million to $2 million. The cap is indexed to assist individuals with maintaining their retirement withdrawals and keep up with cost of living.
What this means for investors: For a couple, this is an extra $200,000 in a tax-free environment. Ensure that you are aware of your personal transfer balance cap before making any decisions to take advantage of this cap.
Government Co-Contribution threshold
Superannuation’s co-contribution scheme is designed to assist those on lower incomes to increase their superannuation balance and be better prepared for retirement.
What this mean for investors: For those on eligible incomes, the government will contribute up to $500 to their superannuation account. There are no forms to fill or administration on your end. If you are eligible, the funds will be deposited into your superannuation account.
From 1 July 2025, the thresholds are changing.
| Year | Maximum entitlement | Lower income threshold | Higher income threshold |
|---|---|---|---|
| 2025–26 | $500 | $47,488 | $62,488 |
| 2024–25 | $500 | $45,400 | $60,400 |
Source: ATO
What isn’t changing
The concessional and non-concessional contribution cap are not increasing. They are remaining at $30,000 and $120,000. Pay attention to the concessional contribution cap in particular. If you have received a pay increase that pushes you past the $30,000 threshold, you may have to pay extra tax.
The Division 293 tax will apply to those on incomes of more than $250,000. If you have received a pay increase that puts you above this amount, ensure you include your extra tax obligations in your portfolio review.
Companies and Shares
Merger Control Reforms
From 1 July 2025, there is voluntary notification under the new mandatory merger control regime. The mandatory reporting will begin in a year on 1 July 2026. The ACCC has declared that this will be a major change for the ACCC, businesses and consumers.
The Treasury Laws Amendment (Mergers and Acquisitions Reform) Act 2024 was passed in November 2024. It changes Australia’s merger control from a judicial enforcement model to a proactive reporting model.
Currently, it is not compulsory to notify the ACCC of an acquisition. Businesses have the ability to ask for the ACCC’s view on the acquisition to prevent legal action after the acquisition.
Under the new regime that’s first phase takes effect on 1 July 2025, businesses contemplating acquisitions will have to notify the ACCC and wait for the go ahead before they are able to commit. They will not be able to acquire businesses without the explicit approval of the ACCC. There are thresholds which mean that only transactions of a certain value must be reported.
What this means for investors: It is important to understand whether any holdings you have in your portfolio are takeover-heavy. Review your holdings and understand whether these tighter regulations change the prospects of any of the companies that you hold. Going forward, especially when the reporting becomes mandatory in 2026, will mean that there will be delays and uncertainty around acquisition activity with Australian companies. Will these changes impact your hypothesis for the shares that you hold?
Your portfolio review
These factors are only one part of your portfolio review. Your review should also encompass your changing circumstances – salary changes, living circumstances, changes in goals. It should also include the hard data, the progress of your portfolio towards your financial goals, the review of your investments and whether they still have a place in your portfolio. Ensure that your review is holistic, and keep these regulatory and legislative changes in mind. Understand how they will impact you and your portfolio.
I’ve written an article on how to conduct a comprehensive portfolio review here.
