Personal Income Tax Cuts

The 2025-2026 budget outlines reductions in the tax rate across all tax brackets.

If you're earning the average income of $79,000, your annual tax saving will be $268 when the new rate of 15% kicks in, increasing to $536 per year once the rate drops further to 14%.

Here's a quick breakdown of your total savings by income bracket by 2027-28:

• $18,201–$45,000: Up to $1,340 in total savings
• $45,001–$135,000: Between $1,340 and $4,265 in total savings
• $135,001–$190,000: Between $4,265 and $5,065 in total savings
• More than $190,000: A fixed saving of $5,065

Additional Funding for ATO Compliance

‍The Government will allocate an extra $717.8 million to extend the Tax Avoidance Taskforce's efforts to address multinational and large business tax compliance through to 2028-29. Additional significant funding will also enhance the Shadow Economy Compliance Program, Personal Income Tax Compliance Program, and the Tax Integrity Program, ensuring timely tax and superannuation payments by medium-to-large businesses and wealthy groups.

Restrictions on Foreign Housing Ownership

‍Effective from 1 April 2025, the Government will implement a two-year ban preventing foreign buyers—including temporary residents and foreign-owned corporations—from purchasing established residential properties. Exceptions apply for investments significantly increasing housing supply, commercial housing provisions, or when housing employees is necessary. Further funding has been granted to the ATO and Treasury to enforce compliance, particularly targeting land banking practices by foreign investors, ensuring vacant lands are promptly used for residential or commercial projects.

Clarification for Managed Investment Trusts (MITs)

‍Legislation will be clarified to ensure that trusts owned by a single widely-held investor, such as a foreign pension fund, qualify as Managed Investment Trusts (MITs). This allows these entities continued access to concessional withholding tax rates on fund payments, aligning with current industry practice. This measure takes effect for fund payments from 13 March 2025.

Deferred Start Date for Clean Energy MITs

‍Implementation of previously announced measures to expand the 10% withholding tax rate under the clean building Managed Investment Trust (MIT) regime to data centres and warehouses—and the introduction of minimum energy efficiency standards—will be deferred. Originally scheduled for 1 July 2025, these changes will now commence only after the enabling legislation receives Royal Assent.

Delayed Foreign Resident CGT Measures

‍The Government has postponed the start date of strengthened Capital Gains Tax (CGT) regulations for foreign residents, originally announced in the 2024-25 Budget. The new start date is delayed to the later of 1 October 2025 or the first quarter after legislative approval.

Key amendments include:

• Expanding and clarifying asset types subject to Capital Gains Taxation for foreign residents.
• Modifying the principal asset test to cover a 365-day period prior to CGT events, making gains taxable if underlying assets are predominantly Australian real estate.
• Requiring foreign residents to notify the ATO ahead of disposals involving shares or interests valued over $20 million.

Though previously discussed in a Treasury Consultation Paper, draft legislation for these measures is yet to be introduced.