Matthew Elmas
WHAT WAS CLAIMED
There has never been a tax on unrealised gains in Australian history.
OUR VERDICT
False. Experts say there are currently, and have been historically, taxes on unrealised gains.
AAP FactCheck – Liberal Party senators are falsely claiming there has never been a tax on unrealised gains or “paper profits” in Australian history.
Experts told AAP FactCheck there are taxes encompassing unrealised gains, including land taxes from states currently, and historically by the Commonwealth.
Liberal Senator Andrew Bragg1 made the claim on Sky News in May 2025 as part of an argument against Labor’s proposed changes to superannuation tax.
The coalition opposes the Albanese government’s plans2 to raise tax on super earnings for accounts valued at more than $3 million, including unrealised gains.
Unrealised gains are paper profits, which reflect an increase in the valuation of an asset that hasn’t been liquidated (sold), including things such as property and shares.
“We’ve never had a tax in Australian history on money that isn’t actually in existence,” Senator Bragg said.
“Many of these profits will be just paper profits that could be there one year and just disappear the next. It is a very unfair concept.”
Liberal Senator Jane Hume made a similar claim in May 2025, reported by Sky News3. “We’ve never had a tax on unrealised capital gains before,” Senator Hume said.
Miranda Stewart4, a tax law expert at the University of Melbourne, said Australia has a long history of taxing the value of held assets without needing them to be sold.
That includes land taxes, which are currently levied at a state level in Queensland5, New South Wales6, Victoria7, Tasmania8 and South Australia9.
From 1910 to 1953, the federal government also levied a tax on the value of “unimproved” land10, which generally refers to vacant land that’s left undeveloped, and could include a residential lot with no habitable dwellings.
“These are actually some of our simplest taxes, and they do require valuation of assets each year,” Professor Stewart told AAP FactCheck.
“Basing a tax on a value without the asset being ‘realised’ or sold is nothing new.”
Senator Hume did not respond to a request for evidence supporting the claim. Senator Bragg told AAP FactCheck that as a federal politician his claim about taxes in Australian history related to Commonwealth legislation, not state law.
Senator Bragg also argued the value of land has risen consistently throughout history, which “muddies the water” around whether land tax is on an unrealised gain.
“Knowing that the value of land (and property) is going to increase makes a land tax a much more sound proposition,” Senator Bragg said. “Land- and homeowners can make the necessary financial arrangements, be it saving, increasing income, or indeed borrowing against the increasing value of the asset, to finance the taxation.”
Statistical evidence11 does show land values have risen consistently throughout Australian history, but Prof Stewart said this doesn’t change what’s being taxed.
“It is still a tax on unrealised (appreciated) value,” she said.
“Without selling the asset, owners do still need to find other cashflow to pay the tax.”
Michael Dirkis12, a taxation law expert at the University of Sydney, said land taxes are levied on the value of land rather than targeting unrealised gains explicitly.
But unrealised gains are captured because the tax is based on asset values, he explained.
“That increase in value is subject to tax, but at a rating level, not at the income-earning level,” Professor Dirkis told AAP FactCheck.
“There are unrealised gains through that evaluation process.”
Prof Stewart said the rules apply to super funds with assets of $100 million or more.
“These rules bring in gains/losses on financial arrangements on the basis of a ‘deemed rate of return’ on the asset, even if the amount is not yet paid,” she explained. Prof Stewart said that while it’s not common to have “market value or unrealised gain” approaches in tax law, it is nevertheless something Australia has experience with.
