Modest two-stage personal income tax cuts
From 1st July 2026, the Government will provide a “modest” tax cut to all taxpayers from 1 July 2026 and again from 1 July 2027.
The tax rate for the $18,201-$45,000 tax bracket will reduce from its current rate of 16%, to 15% from 1 July 2026, then to 14% from 2027-28 at a cost of $648m over four years.
The tax cut savings represent a maximum of $268 in the 2026-27 year and $536 from the 2027-28 year.
Medicare levy thresholds increased for low-income earners
From 1 July 2024, the Medicare levy low-income threshold exempts low-income earners from paying the levy. From 1 July 2024, the threshold for the exemption will increase.
The change will mean low-income earners will pay less when they lodge their income tax returns for 2024-25.
The threshold changes come at a cost of $648m over 5 years.
Announced $150 energy bill relief
From 1 July 2025, between 1 July 2025 and 31 December 2025, households and small businesses will receive an additional automatic credit of $150 on their energy bills in quarterly instalments.
The extension of energy bill rebates will cost $1.8 billion over two years.
Foreign resident CGT amendments delayed
Changes to how foreign residents interact with the tax system were scheduled to take effect on 1 July 2025. These changes have now been delayed.
The start date for proposed amendments to the capital gains tax (CGT) rules for foreign residents has been delayed until 1 October 2025 at the earliest, and potentially later depending on the passage of the reforms through Parliament.
The changes would broaden the range of assets subject to CGT for foreign residents when they dispose of them, amend the rules that determine whether the sale of shares in a company or units in a trust are subject to CGT and require foreign residents to disclose transactions involving shares or trust interests with a value of at least $20 million to the ATO before they occur.
Announced 2-year ban on foreign ownership of established homes
From 1 April 2025, the government banned foreign and temporary residents and foreign-owned companies from purchasing established dwellings to prevent ‘land banking’. The ban applies for 2 years but is subject to some limited exceptions.
‘Help to Buy’ program extended.
The Government’s ‘Help to Buy’ program reduces the deposit required to buy a home by providing an equity contribution. Under the program, Housing Australia provides eligible participants with a Commonwealth equity contribution of up to 30% of the purchase price of an existing home and up to
40% of the purchase price of a new home. They will give you the money and take a stake in your home.
Initially, to be eligible for the program, the income threshold for a single was $90,000 and, for joint participants, $120,000. The Budget increases this threshold to $100,000 and $160,000, respectively. Additional conditions apply.
