From tax cuts to energy bill relief, here’s our breakdown of what’s in the federal budget for individuals and families.
“Modest” two-stage personal income tax cut
| From | 1 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 $536 from the 2027-28 year.
| ResourcesFact sheet: Personal income tax cuts |
Proposed personal income tax threshold
| Thresholds ($) | Rates in 2024–25 and 2025–26 (%) | Rates in 2026–27 (%) | Rates in 2027–28 (%) |
| 0 – 18,200 | Tax free | Tax free | Tax free |
| 18,201 – 45,000 | 16 | 15 | 14 |
| 45,001 – 135,000 | 30 | 30 | 30 |
| 135,001 – 190,000 | 37 | 37 | 37 |
| >190,000 | 45 | 45 | 45 |
Medicare levy thresholds increased for low-income earners
| From | 1 July 2024 |
The Medicare levy low-income threshold exempts low-income earners from having to pay 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.
| 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 |
The threshold changes come at a cost of $648m over 5 years.
Announced $150 energy bill relief
| From | 1 July 2025 |
Households and small business will receive an additional automatic credit of $150 on their energy bills in quarterly instalments between 1 July 2025 and 31 December 2025.
The extension of energy bill rebates will cost $1.8 billion over two years.
Foreign resident CGT amendments delayed
From 1 July 2025, changes to how 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, 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 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.
| Resources ATO Banning foreign purchases of established dwellings |
MIT amendments delayed
The extension of the cleaning building management investment trust (MIT) withholding tax concession was due to commence from 1 July 2025. This has now been delayed until 1 January, 1 April, 1 July, or 1 October after the Act receives Royal Assent.
The Government will also amend the tax laws to clarify arrangements for MITs to ensure that legitimate investors can continue to access concessional withholding rates. The changes will apply to find payments from 13 March 2025 and will complement the ATO’s increased focus in this area to prevent misuse – see Taxpayer Alert 2025/1.
‘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.
ENDS