Australia’s March 2025 Budget: Key Updates You Need to Know

Some of the changes in the most recent Australian budget may affect our clients, especially those planning to move to Australia.

1. Personal Income Tax Cuts

The personal income tax rate for those earning between $18,201 and $45,000 will decrease from 16% to 15% on July 1, 2026. Then, starting July 1, 2027, it will drop further to 14%. This change will provide relief to all tax residents earning above the tax free threshold of $18,200.

2. Australian Property Purchases: A Big Change for Migrants

The Australian government is introducing a major change by banning foreigners from buying established homes in Australia for two years starting April 1, 2025. This directly affects potential migrants who may want to purchase a home, especially those from the UK who may want to buy property when they arrive. However, there are some exceptions, like housing for workers or investments that increase housing availability. This policy is expected to have a big impact on the real estate market, especially in high-demand areas like Sydney and Melbourne.

3. HECS/HELP Debt Forgiveness

The announcement that 20% of HECS/HELP debts will be forgiven is a major relief for Australian graduates with outstanding student loans. The government has also proposed changes to the repayment system, including raising the minimum repayment threshold, which will ease the burden for those who haven’t reached it yet.

4. Changes to Foreign Resident Capital Gains Tax (CGT)

The government has delayed the start of the foreign resident CGT rules until at least October 1, 2025, giving foreign residents time to adjust. The changes will expand the types of assets subject to CGT and make reporting requirements stricter, especially for transactions involving shares or assets worth over $20 million. This is an important change for foreign residents to be aware of, as it will affect their tax obligations when selling Australian assets.

These changes are important for anyone planning to move to Australia or looking to understand their taxation obligations.

Should you have questions or need further clarification on how these updates may impact you, feel free to reach out at info@ukautax.com.