The final FY2025-26 state budgets have been delivered, with Western Australia publishing their budget on 19 June 2025, and the New South Wales, Queensland, and Australian Capital Territory budgets delivered on 24 June 2025.
- NSW: Key changes in the NSW budget include making permanent the temporary 50% land tax concession for new build-to-rent (BTR) developments. The criteria for eligibility for the concession have also been made less stringent, and BTR developers will be able to apply for exemptions from foreign purchaser duty and land tax surcharges.
- QLD: The Queensland budget includes a commitment to streamline the application process for ex gratia relief from the land tax foreign surcharge (LTFS) and additional foreign acquirer duty (AFAD), along with payroll tax exemptions relating to payments to general practitioners (GPs), trainees and apprentices.
- WA: The WA budget temporarily increases the land tax exemption for BTR developments, and increases and extends the duty concessions for off-the-plan purchases and first home owners.
- ACT:The ACT budget introduces a suite of modest changes, including to payroll tax, duty concessions and the introduction of the Short-term Rental Accommodation (STRA) Levy.
New South Wales
The key changes include:
Extension of BTR land tax concession
The existing land tax concession for new BTR developments, set to end 31 December 2039, will apply indefinitely from the 2026 land tax year. The concession allows owners of new BTR developments to apply for a 50% reduction in land value for land tax purposes. Important to note is that developments that have already applied for or are receiving the BTR land tax concession for the 2025 land tax year will be ineligible to receive the extended concession.
BTR developers will also be able to apply for exemptions from foreign purchaser duty and land tax surcharges (or a refund of surcharges paid). Eligibility for the concession has also been extended, with the removal of the requirement that a proportion of labour force hours be performed by specified classes of workers.
The legislation implementing these changes has not yet been introduced to the NSW Parliament.
Minerals royalty
The Revenue and Other Legislation Amendment Bill 2025 (NSW) (NSW Bill) includes changes to the Mining Act 1992 (NSW) and Mining Regulation 2016 (NSW) to introduce a critical minerals royalty deferral scheme. The scheme is intended to support new mining projects and develop an industry segment crucial to the energy transition.
Payroll tax clarifications – Jobs Plus agreements
The NSW Bill also amends the Payroll Tax Act 2007 (NSW) to clarify the payroll tax exemptions for wages that are the subject of Jobs Plus agreements; specifically that to be eligible for the exemption, agreements must have been entered into before 1 July 2024.
Queensland
The key changes include:
LTFS and AFAD – streamlining of ex gratia relief
The Queensland budget includes a commitment to streamline and simplify the ex gratia relief process for LTFS and AFAD. The goal of these changes is to provide greater certainty and timely consideration for applications for relief.
Ex gratia relief is available to Australia-based foreign entities that make a significant contribution to residential housing development. However, those that have made applications for ex gratia relief to the Queensland Revenue Office are likely familiar with years-long wait times and rejected applications on limited reasons, and will welcome this commitment.
The Queensland government will re-establish the Property Consultative Committee to "identify and implement appropriate changes to ex gratia criteria", which should provide industry an opportunity to provide comment. The streamlined scheme is to be developed and finalised before the end of 2025. The goal of the ex gratia scheme remains to support the development of new residential housing.
LTFS and AFAD – revenue protection measures
The Revenue and Other Legislation Amendment Bill 2025 (Qld Bill) includes amendments to the Duties Act 2001 (Qld) and Land Tax Act 2010 (Qld), which are intended to accompany previous amendments made to the Revenue Legislation Amendment Act 2025 (Qld) (RLAA). The collective intention of these amendments is to protect the operation of the foreign surcharge regime (in respect of both AFAD and LTFS), should a court determine that the relevant charging provisions are invalid or inoperative due to inconsistency with Commonwealth legislation. This is to be achieved through the introduction of a "windfall tax" liability as an alternative to foreign surcharge liability.
These amendments relate to the G Global litigation, in respect of which the High Court is currently reserved on the question of whether the foreign surcharge regimes are invalid in respect of certain countries with which Australia has entered into tax treaties that preclude discriminatory taxes.
Payroll tax – GPs
A permanent payroll tax exemption has been introduced for payments by medical practices to contracted and employed GPs. This has been introduced to help protect access to bulk billing, and to support the retention and attraction of GPs in Queensland. A previous amnesty from payroll tax for payments made to contracted GPs was scheduled to end on 30 June 2025.
Payroll tax – extension of apprentice and trainee rebate
The 50% payroll tax rebate for wages paid to apprentices and trainees, due to expire on 30 June 2025, will be extended to 30 June 2026 by the Qld Bill. An additional concession has also been introduced for businesses with annual Australian taxable wages of $1.3 million and above who employ trainees and apprentices.
Transfer duty – abolished for first home buyers buying new home
Transfer duty has been abolished for first home buyers when they purchase either a new build, or a vacant lot to build a new home on. This initiative does not apply to first home buyers purchasing existing dwellings.
Western Australia
The key changes include:
Land tax – temporary increased exemption for BTR developments
The land tax exemption for BTR developments that become operational (ie able to be lawfully occupied) between 1 July 2025 and 30 June 2028 will increase from 50% to 75%. This increased exemption will apply for the first three assessment years, after which the exemption will revert to its original setting of 50%.
Off-the-plan rebate – extension and increase to thresholds
The duty concession for new residential units or apartments purchased off-the-plan was set to end on 30 June 2025; the scheme has been extended to 30 June 2026, and changes have been made to broaden the concession.
The thresholds for the concession have been increased, and the concession has also been extended; while it was previously only available for dwellings in multi-tiered schemes, the concession now applies to off-the-plan purchases of all strata scheme or community title (building) scheme dwellings.
These changes were effected by the Duties Amendment Act 2025 (WA) (WA Act), which came into effect on 20 June 2025, with the key changes applying to transactions made on or after 21 March 2025.
First home owner duty concession – increased thresholds
The WA Act has also increased the exemption and concession thresholds for the first home owner duty concession scheme, in respect of both vacant land and property that includes a home. This will provide greater relief from duty for those that qualify for the first home owner grant under the First Home Owner Grant Act 2000 (WA).
Australian Capital Territory
The key changes include:
STRA Levy
The STRA Levy, introduced in the FY2024-25 budget, will come into effect on 1 July 2025. The levy, which applies to bookings of less than 28 days for un-hosted accommodation, is 5% of the total booking amount paid by the guest.
Payroll tax – reduction of threshold and tax rate
For businesses with Australian wages below $20 million, the payroll tax-free threshold will reduce to $1.75 million, and the tax rate will reduce to 6.75%.
Conveyance duty concession – increase to thresholds
The ACT budget includes modest changes to the threshold (from $1 million to $1.02 million) for several concessions, including the Home Buyer Concessions Scheme, the Off-the-plan duty exemption, and the RZ1 unit duty exemption.
Future tax reform
The ACT budget papers note that while the Government has deliberately slowed their progress in shifting revenue from conveyance duty to general rates, the "fourth stage" of tax reform will begin in 2026-27, with the changes to be announced in next year's budget.
Other State and Territory Budgets
Our commentary on the tax changes in other State and Territory budgets can be found here:
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
