With a renewed and stronger mandate following the May 3, 2025 federal election, the Anthony Albanese-led Labor government is set to continue reshaping Australia’s tax landscape. Their focus remains on delivering cost-of-living relief, boosting fairness in the system, and tightening corporate and superannuation tax concessions. Many of these reforms are already in motion, while others are on the horizon for the coming term.
Here’s a clear breakdown of the key tax policies Labor has already introduced—and what they’re planning next
1. Personal Income Tax Cuts
To provide tax relief to a broader segment of Australians, the government has legislated further reductions to the individual income tax rate for the lowest bracket. The rate for income between $18,201 and $45,000 will drop:
- From 16% to 15% starting 1 July 2026
- From 15% to 14% starting 1 July 2027
These changes are designed to increase disposable income for low- and middle-income earners and help offset rising living costs.
2. Support for Small Businesses
The popular $20,000 instant asset write-off has been extended until 30 June 2026. This measure allows small businesses with an annual turnover of less than $10 million to immediately deduct the full cost of eligible depreciating assets. It is expected to improve cash flow and encourage reinvestment in business operations.
3. Simplified Tax Deductions for Employees
Starting 1 July 2026, employees will be able to claim an optional $1,000 instant tax deduction using a simplified substantiation process. This policy aims to streamline the tax return process for individual taxpayers and reduce compliance burdens for those with minimal or standard deductions.
4. Support for First Home Buyers
The government is addressing housing affordability through several targeted initiatives:
- Low Deposit Scheme: Eligible first home buyers can access a mortgage with as little as 5% deposit, with the government guaranteeing the remaining 15% to avoid lenders mortgage insurance.
- Housing Investment: A $10 billion investment has been committed to build up to 100,000 new homes exclusively for first home buyers over the next decade.
These measures aim to make home ownership more attainable for Australians struggling to enter the property market.
5. Div 296 tax on superannuation account with balance of more than $3mil
The Labor Government’s previously attempted and failed Div296 regime, taxing unrealised capital gains in super, is now a matter of when, not if. With the number of seats won, it is likely the re-elected Government will only need the support of the Greens in the Senate to pass this legislation. It’s a question if they can push it through for a 1 July 2025 start or make the effective date as 1 July 2026.
We’re here to help
With all the recent tax updates, it’s normal to have questions. Our team is here to break it down and make things simpler. Let’s chat—reach out to us anytime for advice you can trust.
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Disclaimer
This article serves as general information only and may not account for the unique circumstances of individual readers. For personalised and strategic solutions tailored to your specific situation, we invite you to seek professional advice from Chan & Naylor. Our highly experienced team is dedicated to helping you navigate the complexities of Australian taxation, ensuring that your financial strategies align with the latest regulations. Contact us today to embark on a path of informed and customised tax planning for your property investments.
