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Federal Budget 2025–26: What It Means for Your Family, Business & Future

Latitude Accountants break down the Federal Budget 2025–26

What It Means for Your Family, Business & Future

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The 2025–26 Federal Budget might’ve made headlines with personal income tax cutsβ€”but what does it really mean for you? Whether you’re a working professional, business owner, investor or student, there’s a lot to unpack.

Latitude Accountants has broken it all down into plain English, with answers to the biggest questions Australians are asking. Let’s dive in.

πŸ“Œ Quick Budget Highlights

  • Income tax cuts of up to $536 over two years

  • $150 energy rebate for all households and small businesses

  • Non-compete clauses banned from 2027 for many employees

  • Help to Buy scheme extended

  • Foreign CGT amendments delayed

  • Big ATO funding boost to crack down on non-compliance

What are the new income tax rates from 1 July 2026?

From 1 July 2026, income tax rates for most Australians will reduce:

Income Bracket Current Rate 2026–27 2027–28
$18,201–$45,000 16% 15% 14%

These β€œmodest” cuts translate to a saving of up to $268 in 2026–27 and $536 from 2027–28.

Who benefits from the Medicare levy threshold increase?

Low-income earners! From 1 July 2024, the threshold for paying the Medicare levy increases. For example, a single’s threshold will rise from $26,000 to $27,222.

Q: Do pensioners get an increased threshold too?
Yesβ€”single seniors and pensioners will now have a threshold of $43,020, helping them save come tax time.

What is the $150 energy rebate?

From 1 July 2025 to 31 December 2025, eligible households and small businesses will automatically receive $150 off their power bills, spread across two quarterly instalments.

Can foreign residents still buy homes in Australia?

Not for the next 2 years. From 1 April 2025, foreign and temporary residentsβ€”and foreign-owned companiesβ€”are banned from buying existing homes in Australia, to help fight land banking.

What’s changing for foreign residents and CGT?

Changes to capital gains tax (CGT) rules for foreign residents were meant to start in July 2025, but have been delayed. The new earliest start date is 1 October 2025, pending parliamentary approval.

These changes will broaden which assets are subject to CGT and introduce new disclosure requirements for large share or trust sales.

Is the ‘Help to Buy’ program still going?

Yes! The Federal Government is extending the scheme, where eligible buyers can co-purchase a home with the Government. The income thresholds have increased:

  • Singles: $90,000 β†’ $100,000

  • Couples: $120,000 β†’ $160,000

Note: This program is not currently accepting applications but is being expanded with $800 million in funding.

What does the ban on non-compete clauses mean for employees?

From 2027, most non-compete clauses will be banned for low- and middle-income workers (those earning under the high-income threshold, currently $175,000). This promotes wage growth and job mobility.

What is the Government doing to boost tax compliance?

The ATO will receive $999 million over 4 years to enhance its compliance efforts. Focus areas include:

  • Tax Avoidance Taskforce

  • Shadow Economy Compliance

  • High net worth individuals & large businesses

  • Personal income tax audits

Q: Could I be affected?
If you’re operating a business, especially in cash-heavy industries, or have complex structures, expect closer scrutiny.

What’s the forecast for Australia’s economy?

  • Growth: Expected at 2.25% in 2025–26

  • Inflation: Stabilising around 2.5%

  • Wages: Forecast to grow by 3.25% through 2026

  • Unemployment: Likely to peak at 4.25%

  • Debt: Rising to 21.5% of GDP in 2025–26

Final thoughts: What does this mean for me?

This Budget offers small wins for individuals, households and small businesses, but also signals a stronger compliance environment. Whether you’re navigating tax cuts, government grants, or regulatory changesβ€”it’s important to stay informed and plan ahead.


πŸ’¬ Need help navigating the 2025–26 Budget changes?

Whether you’re a business owner, investor or family planning aheadβ€”Latitude Accountants can help you make sense of how these policies affect your finances. Book a chat today and stay ahead of the curve.

πŸ“ž Contact Latitude Accountants
πŸ“§ info@latitudeaccountants.com.au
🌐 www.latitudeaccountants.com.au

Disclaimer

The information contained in this blog is general in nature and is provided for educational purposes only. It does not constitute financial, taxation, business or legal advice and should not be relied upon as such. While every effort has been made to ensure the accuracy of the information at the time of publication, changes in government policy, legislation, or your personal circumstances may affect its relevance or accuracy.

Latitude Accountants makes no warranties or representations regarding the completeness, reliability or suitability of the information provided. We strongly recommend speaking with a qualified professional before making any financial or business decisions based on this content.

For personalised advice tailored to your situation, please contact the team at Latitude Accountants.

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