Federal Budget 25-26: What It Means for You and Your Business

The 2025–26 Federal Budget has landed, with the government continuing its focus on easing cost-of-living pressures, strengthening small business support, and tightening integrity across the tax system. Most changes kick in from 1 July 2025, aligning with the new financial year. However, some measures—like energy bill relief—apply sooner. Now is the time to prepare so you’re ahead of the curve. At Zweck, we’ve reviewed the budget in detail and summarised the key measures for you.

For Households

Stage 3 Personal Income Tax Cuts – Revised but Going Ahead

The 19% rate will be reduced to 16%
The 32.5% rate will drop to 30% for incomes between $45,000 and $135,000
Higher thresholds will apply for the 37% and 45% brackets

These adjustments mean more disposable income for most workers. Whether you’re saving, investing, or just covering everyday expenses, the tax cuts will put more money back into your pay packet from 1 July 2025.

Medicare Levy Thresholds Increased

Thresholds have been raised to reflect wage growth, exempting more low and middle-income earners from the 2% Medicare levy.

$300 Energy Bill Rebate for Every Household

Every household in Australia will receive a $300 electricity rebate, applied automatically in quarterly installments through energy retailers. This is a universal rebate—not means-tested—and is designed to ease the pressure from rising energy costs, especially during peak usage months.

For Small Businesses

$20,000 Instant Asset Write-Off Extended

The government has proposed extending the $20,000 asset write-off to 30 June 2025 for small businesses. This measure is still before Parliament and hasn’t yet been passed into law. It applies to each individual asset used or installed by 30 June 2026.

Energy Bill Relief Fund

From 1 July to 31 December 2025, eligible households and small businesses will receive $75 per quarter off their electricity bills from 1 July to 31 December—totalling $150 per household.

Funding for Cybersecurity and Digital Capability

New funding to help small businesses strengthen cybersecurity and upgrade digital systems. With cyber threats on the rise, these incentives help businesses future-proof their operations and remain competitive in a digital economy.

Help businesses invest in security upgrades like multi-factor authentication, secure cloud storage, and data protection tools
Provide access to cyber health checks and advisory services to assess risks and improve resilience
Support the adoption of digital technologies, including e-invoicing, cloud software, customer management platforms, and online services
Improve online visibility and customer engagement through digital capability programs

Other Changes Worth Knowing

Tightening of Foreign Resident CGT Rules

Expanding and clarifying Capital Gains Tax (CGT) rules for foreign residents in the 2025–26 Budget. The proposed reforms aim to:

Close existing loopholes that allow foreign investors to avoid CGT on Australian assets
Clarify the definition of “taxable Australian property”, ensuring a more consistent application of the rules
Ensure that foreign investors pay their fair share of tax when disposing of Australian real estate and other relevant interests

These changes ensure that CGT rules are applied more effectively to cross-border transactions. If you have overseas interests or clients who do, these changes may influence decisions around property sales, structuring, and timing.

Managed Investment Trust (MIT) Reform

The Government has announced it will review and tighten tax concessions for Managed Investment Trusts (MITs), with a focus on limiting access for foreign investors. The focus is on tightening eligibility and preventing business income from being misclassified as passive income. This could affect investment structures and distributions for some trusts. It’s important to review trust arrangements before EOFY.

Compliance and Regulatory Updates

ATO Integrity Measures

The ATO will receive additional funding to strengthen tax system integrity, with a focus on:

Expanding the Tax Avoidance Taskforce to target high-wealth individuals and complex tax schemes
Boosting GST compliance, including identifying under-reporting and fraud
Increasing audits of high-risk claims like work-related deductions, rental expenses, and R&D incentives

Regulation of Tax Practitioners

The Government will provide additional funding to the Tax Practitioners Board (TPB) to strengthen regulation and enforce professional and ethical standards across the tax profession. With greater enforcement on the horizon, it’s crucial to work with qualified, transparent, and proactive advisors—like Zweck—to keep your affairs in order.

Need Help Navigating the Changes?

With an election around the corner, much depends on the outcome and direction of the next government. While temporary relief and targeted compliance funding dominate the announcements, deeper tax system reform remains absent. If you have questions about how these announcements affect your personal or business tax planning, please get in touch with our office. We’re here to help you navigate this uncertain landscape with clarity and confidence.