Federal Budget 2025–26: What It Means for You

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The Federal Government handed down its 2025–26 Budget on 25 March 2025. Marketed as a “plan for a new generation of prosperity,” the Budget focuses on cost-of-living relief, housing, education, and tax integrity. Here are the key highlights for individuals, businesses, and the community.

Tax Relief for Individuals

  • Income tax cuts: From 1 July 2026, the marginal tax rate for incomes between $18,201 and $45,000 will fall from 16% to 15%, and then to 14% from 1 July 2027
  • Medicare levy thresholds: From 1 July 2024, thresholds will rise, giving more relief to singles, families, and pensioners
  • Student debt: All outstanding HELP and student loans will be cut by 20% before 1 June 2025, removing around $16 billion in debt. From 1 July 2025, repayments will shift to a marginal system, with the minimum repayment threshold increasing to $67,000

Housing Measures

  • Foreign buyers ban: From 1 April 2025, foreign persons (including temporary residents and foreign-owned companies) will be banned from buying established dwellings for two years. Exceptions apply where investments boost supply or provide worker housing
  • Compliance crackdown: The ATO will receive funding to enforce the ban and audit “land banking” practices by foreign investors

Business and Investment

  • Managed investment trusts (MITs): Amendments will ensure genuine investors can continue to access concessional withholding tax rates from 13 March 2025
  • Clean building MIT concessions: The start date for extending the concessional rate to data centres and warehouses has been deferred beyond 1 July 2025
  • ATO compliance funding: Nearly $1 billion over four years will boost compliance programs, targeting multinationals, shadow economy activity, and tax integrity

Other Key Measures

  • Tax practitioners: Stronger regulation will modernise the system and give the Tax Practitioners Board more power to sanction misconduct
  • Charities and NFPs: Several organisations will be added to the deductible gift recipient list, enhancing their fundraising opportunities
  • Alcohol and tariffs: Draught beer excise indexation will be frozen for two years from August 2025. The excise remission cap and WET rebate for alcohol manufacturers will both increase to $400,000 from 1 July 2026. Tariffs on Russian and Belarusian goods will be extended for two more years

The Bottom Line

This Budget offers meaningful relief for individuals and students, tighter rules for foreign property investors, and continued ATO focus on compliance. For businesses, the measures are more about maintenance than reform, but they highlight the need to stay compliant and prepared.

👉 Want to know how these changes affect you or your business? Contact Richard A Bobb Chartered Accountants for tailored guidance.

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