Two-Stage Personal Income Tax Cut

From 1 July 2026

The Government will implement a tax cut for all taxpayers starting from 1 July 2026 and continuing from 1 July 2027.

The tax rate for the $18,201–$45,000 income bracket will decrease from the current rate of 16% to 15% from 1 July 2026, and further to 14% from 2027–28. This adjustment will cost $648 million over four years.

 

The savings for taxpayers will be a maximum of $268 in the 2026–27 year and $536 in the 2027–28 year.

 

Medicare Levy Thresholds Increased for Low-Income Earners

From 1 July 2024

The Medicare levy low-income thresholds will increase, exempting more low-income earners from paying the levy.

Category	2024–25 Threshold	2025–26 Threshold
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/student	$4,216	$4,027

This adjustment will reduce the levy burden for low-income earners when they file their tax returns for the 2024–25 year, with a cost of $648 million over five years.

 

Proposed Personal Income Tax Thresholds

Income Range ($)	Tax Rate 2024–25 & 2025–26 (%)	Tax Rate 2026–27 (%)	Tax Rate 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

Announced $150 Energy Bill Relief

From 1 July 2025

Households and small businesses will receive an additional automatic $150 credit on energy bills in quarterly instalments between 1 July 2025 and 31 December 2025. This initiative will cost $1.8 billion over two years.

 

Foreign Resident CGT Amendments Delayed

From 1 July 2025

The proposed amendments to the capital gains tax (CGT) rules for foreign residents have been delayed until 1 October 2025 or later, depending on Parliament’s passage of the reforms.

These amendments would expand the range of assets subject to CGT for foreign residents and require them to disclose transactions involving shares or trust interests worth over $20 million to the ATO before they occur.

 

Announced 2-Year Ban on Foreign Ownership of Established Homes

From 1 April 2025

The Government will ban foreign and temporary residents, as well as foreign-owned companies, from purchasing established homes for two years, with limited exceptions.

 

MIT Amendments Delayed

The extension of the cleaning building management investment trust (MIT) withholding tax concession, originally set for 1 July 2025, has been delayed to the first 1 January, 1 April, 1 July, or 1 October following the Royal Assent of the relevant Act. Additional clarifications to ensure legitimate investors can continue to access concessional withholding rates will be effective for payments from 13 March 2025.

 

‘Help to Buy’ Program Extended

The ‘Help to Buy’ program assists homebuyers by reducing the required deposit through a Commonwealth equity contribution. Eligible participants can receive up to 30% of the purchase price of an existing home or up to 40% for a new home.

The income eligibility thresholds have been increased:

• Singles: From $90,000 to $100,000
• Joint Participants: From $120,000 to $160,000

The program is currently not available to applicants.