On 25 March 2025, the Federal Government delivered its fourth Budget, focusing on five key priorities, including cost-of-living relief, housing, and education.
Among the major announcements were two unexpected personal tax cuts for all individual taxpayers, higher Medicare levy thresholds, a ban on foreign buyers purchasing existing homes, and a proposed reduction to student debts.
The Budget also projects a $27.6 billion deficit for 2024–25, with further deficits of $42.1 billion in 2025–26 and $35.7 billion in 2026–27.
While this year’s Budget was light on detail, we’ve broken down the key tax and superannuation highlights you need to know.
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 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% and other reforms will be made to the student loan repayment system from 1 July 2025.
- The start date of the 2024–25 Budget measure to strengthen the foreign resident CGT regime will be deferred from 1 July 2025 to the later of 1 October 2025 or the first 1 January, 1 April, 1 July or 1 October after assent.
- Foreign ownership of housing will be restricted.
Tax administration
- Rules on managed investment trusts will be amended to ensure legitimate investors can continue to access concessional withholding tax rates from 13 March 2025.
- The start date of the 2023–24 Budget measure to extend the clean building managed investment trust withholding tax concession will be deferred from 1 July 2025 to the first 1 January, 1 April, 1 July or 1 October after assent.
- The ATO will be given $999 million in funding over 4 years to extend and expand its tax compliance activities.
Tax agents
- Tax practitioner regulation and compliance will be enhanced by strengthening sanctions available to the Tax Practitioners Board and modernising the registration framework.
Treasury portfolio (ASIC)
- Additional funding has been allocated to the Australian Securities and Investments Commission (ASIC) to improve the ASIC business registers.
Not-for-profits
- The deductible gift recipients list will be updated.
Indirect taxes
- Indexation on draught beer excise and excise equivalent customs duty rates will be paused for a two‑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.
- Additional tariffs on goods that are the produce or manufacture of Russia or Belarus will be extended by a further two years.
Superannuation
- The government’s Payday Super reform is set to begin on 1 July 2026. To support the change, the government is investing $404.1 million over four years from 2024-25 (and $11.2 million per year ongoing).
To assist you with understanding the key measures contained in the Budget, download our Budget Paper report below.
