What does the 2025-26 Federal Budget mean for you?

The Federal Treasurer, Dr Jim Chalmers, delivered the 2025–26 Federal Budget at 7:30 pm (AEDT) on 25 March 2025.  

Guided by five main priorities, including tackling the cost-of-living crisis, boosting housing supply, and investing in education, the Budget introduces new personal tax cuts for all Australian taxpayers, raises Medicare levy thresholds, bans foreign individuals from buying existing homes, and proposes a reduction in student debts. 

With the next federal election looming, several previously announced tax measures have been postponed. The Treasurer dubbed this Budget a “plan for a new generation of prosperity in a world of uncertainty.” Notably, there are no new measures impacting superannuation taxation or small business income tax. 

The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au. The tax and tax-related highlights are set out below. 

We are pleased to provide you with this brief summary of the measures that may impact you, and as always, welcome your questions to our team. 

Individuals

• The marginal tax rate for the personal income tax threshold bracket from $18,201 to $45,000 will be reduced from 16% to 15% from 1 July 2026, and further reduced to 14% from 1 July 2027.   
  
• The applicable marginal tax rates and income thresholds for recent income years, as well as the proposed new rates, are depicted in the table below. 
  
  

• The Medicare levy low‑income thresholds for singles, families, and seniors and pensioners will be increased from 1 July 2024.
  
  
• Student loan debts will be cut by 20% before indexation is applied on 1 June 2025. Other reforms will be made to the student loan repayment system from 1 July 2025. The minimum repayment threshold is proposed to increase from $54,435 in 2024–25 to $67,000 in 2025–26.
  
  
• The start date of the 2024–25 Budget measure to strengthen the foreign resident CGT regime will be deferred from 1 July 2025 to 1 October 2025 subject to assent of the amending legislation.
  
  
• Foreign ownership of housing will be restricted. Banning foreign persons (including temporary residents and foreign owned companies) from purchasing established dwellings for two years from 1 April 2025.

Small Business

• Up to $800 in energy bill rebates for eligible small businesses. Extending energy bill relief to 31 December 2025 to provide cost-of-living relief.
  
  
• Indexation on draught beer excise and excise equivalent customs duty rates will be paused for a 2‑year period from August 2025.
  
  
• The excise remission cap is proposed to be increased from $350,000 to $400,000 each financial year for all eligible alcohol manufacturers from 1 July 2026. The Wine Equalisation Tax producer rebate would similarly increase from $350,000 to $400,000 each financial year from 1 July 2026. 

Tax Administration

• The ATO will be given $999 million in funding over 4 years to extend and expand its tax compliance activities. The additional funding will provide the ATO with more resources to ensure tax compliance.

For more details please access our full budget report HERE.