Personal income tax measures
The Government will provide a “modest” tax cut to all taxpayers from 1 July 2026 and again from 1 July 2027.
These tax cuts are in addition to the tax cuts that became effective from 1 July 2024.
- From 1 July 2026, the 16% rate will be reduced to 15%.
- From 1 July 2027, the 15% rate will be reduced further to 14%.
The savings from the tax cut represents a maximum of $268 in the 2026-27 financial year and $536 from the 2027-28 year.
Medicare levy thresholds increased
From 1 July 2024, the government will raise the Medicare levy low-income thresholds for singles, families, and seniors and pensioners. Individuals earning below the threshold will either be exempt from paying the Medicare levy or will pay a reduced rate.
| 2024-25 | 2025-26 | |
| Singles | $26,000 | $27,222 |
| Families | $43,846 | $45,907 |
| Single seniors & pensioners | $41,089 | $43,020 |
| Family seniors & pensioners | $57,198 | $59,886 |
| Family additional child or student | $4,216 | $4,027 |
Energy Bill Relief
Households and small business will receive an additional automatic credit of $150 on their energy bills in two (quarterly) instalments between 1 July 2025 and 31 December 2025.
Apprenticeships – financial incentives
From 1 July 2025, eligible apprentices in housing construction occupations will receive up to $10,000 in financial incentives over the course of their apprenticeships.
Healthcare
The Budget announcements with regards to Healthcare include:
- an increase to Medicare payments
- 50 new urgent care clinics
- cheaper medicines on the Pharmaceutical Benefits Scheme.
- $240m for women’s health (reproductive health and menopause)
Education
Students HECS-HELP debts are set to be cut by 20% (subject to legislation passing). The Government will also look to increase the amount that people can earn before they are required to start paying back their loans from $54,435 in 2024–25 to $67,000 in 2025–26.
Childcare
Three days of subsidised childcare will be available for families with young children (income tested) from 1 January 2026, replacing the current Child Care Subsidy activity test.
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. That is, they will give you the money and take a stake in your home.
Originally, 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.
The program is not currently available to applicants.
Two year ban on foreign ownership of established homes
From 1 April 2025, the Government has 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.
Foreign resident CGT amendments delayed
From 1 July 2025, the way in which foreign residents interact with the tax system were scheduled to come into effect. 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.
Disaster Recovery Allowance
The Government has activated the Disaster Recovery Allowance which provides up to 13 weeks of income support, and the Australian Government Disaster Recovery Payment which provides a one-off payment to those eligible and impacted by ex-Tropical Cyclone Alfred.
