2025 Budget Breakdown: What Everyday Australians Need to Know
The 2025 Federal Budget has landed—and while it might seem like something only accountants and politicians need to worry about, the truth is this: these changes will impact your household, your pay packet, and your future planning.
Whether you’re managing a family budget, saving for a home, or trying to stretch your income further, this year’s updates offer a mix of relief and opportunity. Here’s what you need to know—and how to get ahead.
💰 Personal Income Tax Cuts – More Back in Your Pocket
Starting 1 July 2026, the Government will roll out a two-phase personal income tax cut aimed at low- and middle-income earners.
- From 2026–27: The tax rate on income between $18,201–$45,000 drops from 16% to 15%
- From 2027–28: It will reduce further to 14%
- From 2026–27: The tax rate on income between $18,201–$45,000 drops from 16% to 15%
🔎 Potential savings:
- Up to $268 in 2026–27
- Up to $536 from 2027–28
- Up to $268 in 2026–27
What this means for you:
These tax cuts are designed to help ease cost-of-living pressures, allowing you to keep more of your earnings and build some breathing room into your budget.
Planning Tip: While the cuts won’t start for another year, it’s a good time to review your budgeting goals. Use the expected savings as a buffer for rising expenses or to accelerate savings on things like school fees, holidays, or unexpected costs.
🩺 Higher Medicare Levy Thresholds – Tax Relief for Low-Income Earners
From 1 July 2024, more Australians will be exempt from paying the Medicare levy thanks to increased income thresholds.
Category | 2025–26 Threshold |
Singles | $27,222 |
Families | $45,907 |
Single seniors/pensioners | $43,020 |
Family seniors/pensioners | $59,886 |
Why this matters:
If your income is near or below these thresholds, you’ll now be exempt from the 2% Medicare levy—putting more money back in your hands each year.
💡 Real-World Impacts:
For a single parent earning just under $46,000, this could mean an annual tax saving of over $900, simply from falling below the new family threshold.
⚡ $150 Energy Bill Relief – Automatic Credit for Households
From 1 July 2025, eligible households will receive a $150 energy bill credit applied automatically over six months.
How this helps:
This is a direct cost-of-living offset designed to support Australians facing rising utility bills. There’s no application process—just a lower bill at a time when every dollar counts.
🟢 Tip: Use this period of relief to reassess your utility providers or build a small emergency fund. Even a few months of savings can make a long-term difference.
🏡 Help to Buy Scheme – Expanding Access to Home Ownership
The Government is expanding its “Help to Buy” shared equity scheme to help more Australians enter the housing market:
Income eligibility increased:
- Singles up to $100,000
- Couples up to $160,000
- Singles up to $100,000
Equity contribution by Government:
- Up to 30% for existing homes
- Up to 40% for new builds
- Up to 30% for existing homes
Why this matters:
With housing affordability remaining a national challenge, this could open the door for first-home buyers struggling to meet deposit requirements or manage mortgage repayments alone.
🚨 Important Note:
The program is not yet open—but being prepared now (with your income and savings documents ready) could put you in a strong position once applications are live.
🌏 Foreign Ownership Ban on Established Homes – What It Means for Buyers
From 1 April 2025, foreign investors can no longer purchase established homes in Australia (with limited exceptions).
The takeaway:
This measure may cool housing demand, especially in inner-city markets—creating more breathing space for local buyers. If you’re in the market, keep an eye on how this affects listing volumes and price movements in your area.
🧾 What This All Means
In a time of rising costs and growing uncertainty, even small shifts in tax and policy can make a big difference to your household’s trajectory. Whether it’s a few hundred dollars in savings or a new pathway into the housing market, staying informed is the first step to staying in control.
This Budget brings a clear message: now’s the time to be proactive—not reactive.
📲 Ready to Plan Ahead? We’re Here to Help.
If you’re wondering how these changes will affect your tax return, your eligibility for programs, or your broader planning strategy—we’re just a call away.
Aero Accounting Group helps individuals and families cut through the confusion and get clarity. From personal tax returns to navigating complex government schemes, we’re your trusted partner in staying one step ahead.
Need help?
Not sure if your current accountant is a good long-term fit? Contact us at Aero Accounting Group today and we’ll help you minimise your taxes and maximise your profits
