In brief
The 2025-26 Australian Capital Territory (ACT) Budget (the Budget) was delivered on 24 June 2025 by the ACT Treasurer, Chris Steel, MLA.
The Budget aims to address economic growth with reforms in taxation and infrastructure investment. It anticipates a deficit of $424.9m, improving from $624.1m last year, with the economy benefiting from strong employment and easing inflation. The shift from transactional taxes to land taxes continues, with reforms increasing general rates and reducing stamp duty. Key initiatives include raising payroll thresholds, introducing new levies, and expanding housing projects. Infrastructure spending will focus $8.1bn on health, education, and transport to boost urban growth, with plans for 30,000 new homes by 2030 and funding for affordable housing.
In detail
Economic outlook
The deficit position for the 2025-26 financial year (i.e. -$424.9m) is expected to decrease as against the 2024-25 Budget (i.e. -$624.1m), with the Headline Net Operating Balance position expected to return to surplus in the 2027-28 ($47.9m) and 2028-29 ($330.6m) financial years.
Notwithstanding the deficit position, the economy has performed broadly in line with the forecasts in the 2024-25 Budget Review. This is due to broad-based growth in the ACT economy, driven by a resilient labour market with the lowest unemployment rate in Australia. Employment is growing faster than the population, which is projected to increase by 2% in 2024-25. Household consumption and private investment are expected to return to long-run averages, supported by easing inflation and moderating interest rates.
In 2024-25, total own source taxation revenue is estimated to be $2.7bn, which is $25.7m lower than the 2024-25 Budget estimate. This reflects lower estimates for revenue from payroll tax (by $36.7m), commercial conveyance duty (by $15.3m), the Lease Variation Charge (by $65.5m) and gambling taxes (by $2.8m).
Further, general rates revenue is estimated to be $813.5m in 2024-25, $5.2m higher than the 2024-25 Budget estimate. This is largely due increases in average rates under tax reform, the addition of new properties to the general rates base, changes in the mix between commercial and residential properties, and additional policy measures.
Taxation measures
The ACT Government continued to progress its tax reform program, transitioning away from transaction-based taxes to general rates. This Budget also expands access to residential conveyance duty concessions and estimates own source revenues are forecast to be $383m higher than the 2024-25 Budget estimates over the four years from 2024-25 to 2027-28.
Duties and general rates
The ACT Government will continue to phase out stamp duty in accordance with its 20-year tax reform plan. Relevantly, since 2012-13 insurance and conveyance duty rates have decreased with the revenue foregone being replaced by incremental increases in general rates (i.e. a more stable and predictable source of revenue). (Note: Insurance duty was fully abolished in 2017, while conveyance duty is being phased out gradually over time to minimise transitional impacts.)
The share of insurance and conveyance duties in total own-source taxation revenue is expected to decline from around 26% when the program started in 2012-13 to 9.9% by 2028-29. General rates and payroll tax are estimated at 60% of own-source taxation revenue for 2025-26.
Key duty and general rates updates are set out below.
- The lowest marginal conveyancing duty tax rate for owner homebuyers will reduce from 0.4% to 0.28% in 2025-26.
- The commercial duty threshold has increased from $1.5m to $2m.
- From 1 July 2025, the Home Buyer Concession Scheme (HBCS), Pensioner Duty Concession Scheme and Disability Duty Concession Scheme price thresholds will increase to $1,020,000 from $1,000,000 in 2025-26. Price thresholds will be indexed annually to the Canberra Consumer Price Index, rounded to the nearest $5,000.
The price thresholds for the off-the-plan and RZ1 unit duty exemptions will also be increased to $1,020,000 for 2025-26.
- In 2025-26, the average general rates will increase by 3.75% for residential and commercial properties and by 3.25% for rural properties, along with the introduction of a new land value threshold for non-units with an average unimproved value (AUV) of over $1m.
- The Government will reduce motor vehicle duty concessions for zero emission vehicles to ensure a minimum 2.5% duty is paid on new transactions and with increasing duty rates proportionally based on emissions and value, from 1 September 2025. A new tax rate of 8% for motor vehicle duty on the value of vehicles above $80,000 will also apply.
Land tax
Land tax assessments in 2025-26 are calculated on a valuation-based charge using the 2025 threshold at $1m AUV, and a fixed charge of $1,693. Foreign investors who own residential property in the ACT are also liable for a surcharge of 0.75% of the property’s AUV. The table below shows the land tax marginal rates that apply to residential properties in 2025-26 (which have not changed as against the prior year):
| Block AUV threshold | 2025-26 |
| $0 to $150,000 | 0.54% |
| $150,001 to $275,000 | 0.64% |
| $275,001 to $ 1,000,000 | 1.24% |
| $1,000,001 to $2,000,000 | 1.25% |
| $2,000,0001+ | 1.26% |
Commercial general rates
Commercial general rates revenue is projected to rise from $287.5m in 2024-25 to $309.7m in 2025-26. This increase is primarily due to annual average rate hikes under tax reform, a new $5m AUV threshold, the Health Levy (see below), and more commercial properties. Commercial general rates include a fixed charge of $3,355 and marginal rates applied to the AUV of commercial properties for 2025 and a Health Levy of $250. From 2025-26, a single set of tax rates will be reinstated following the 2020-21 freeze that was implemented as part of the COVID-19 Economic Survival Package. The table below shows the land tax marginal rates for commercial properties in 2025-26:
| Block AUV threshold | 2025-26 marginal rates |
| $0 to $150,000 | 3.6560% |
| $150,001 to $275,000 | 4.2235% |
| $275,001 to $600,000 | 5.8024% |
| $600,001 to $5,000,000 | 5.8660% |
| $5,000,0001+ | 5.9670% |
Payroll tax
The Government will reduce the payroll tax-free threshold from $2m to $1.75m national wages and adjust tax rates, from 1 July 2026. Relevantly, the changes are as follows:
- firms with national wages between $1.75m and $20m will be taxed at 6.75%, lower than the current tax rate of 6.85%.
- firms with national wages between $20m and $50m will be taxed at the current rate of 6.85%.
- firms with national wages between $50m and $100m will be taxed at 7.25%.
- firms with national wages above $100m will be taxed at 7.75%.
New expenditure will provide for additional staff for the ACT Revenue Office, to support the implementation of payroll tax changes.
Levies
The Government will address increased demand in the public health system and a declining Commonwealth Contribution Rate to public hospitals. From 2025-26 to 2028-29, general rates bills for each rateable property (residential, commercial and rural) will include a $250 Health Levy to address increased costs in the health system.
The Ambulance Levy rate, paid by Private Health Insurers, will increase by an additional 10% from 1 January 2026. The residential and rural Police, Fire and Emergency Services Levy will increase by $30 in 2025-26 to $426. The Safer Families Levy will increase by $10 in 2025-26.
The Government will introduce a new Short-term Rental Accommodation Levy from 1 July 2025 of 5% of gross revenue, with revenue from the levy estimated to be $16.4m over the four years from 2025-26 to 2028-29.
Utilities (Network Facilities) Tax
The Government will increase the Utilities Network Facilities Tax, charged on the owners of network facilities on land in the ACT, by an additional 2.5 percentage points above the Wage Price Index) for 2025-26 and 2026-27.
Infrastructure measures
Planning for more public housing
The Government is continuing its commitment to increase housing supply, access and choice to accommodate the city’s growth, aiming to enable 30,000 homes by 2030. It plans to deliver over 1,000 additional public housing dwellings, contributing towards the Government’s commitment to build 5,000 public, community and affordable homes by 2030 and expand the Housing ACT property portfolio to 13,200 homes by the end of 2030.
This funding expands on a range of initiatives previously funded by Government such as:
- $52m in the expanding investment in social housing initiative in the August 2020 Economic and Fiscal update;
- $19m in the 2021-22 Budget initiative Growing and Renewing Public Housing – Securing High Quality Public Housing;
- $29.8m in the 2022- 23 Budget initiative Growing and Renewing Public Housing – Securing High Quality Public Housing;
- $55.9m provided in the 2023-24 Budget initiative Increasing Housing Access, Choice and Affordability – Continuing to maintain high quality public housing; and
- 2024-25 capital allocation of $51m in the Budget initiative – Continuing the Growth and Renewal of Public Housing and Social Housing Accelerator.
Affordable Housing Land Tax Exemption Scheme expansion
This initiative increases the current property cap of the Affordable Community Housing Land Tax Exemption Scheme from 250 to 1,000 properties. The scheme helps make rentals more affordable for people on low incomes and gives property owners a full land tax exemption if they rent their properties to eligible tenants through a registered community housing provider at less than 75% of the market rent.
Increasing Affordable Housing Project Fund
The Government will provide funding to help deliver the commitment of an additional 5,000 social and affordable homes by the end of 2030. This includes increasing the Affordable Housing Project Fund from $80m to $100m and affordable rental conversions. This builds on an additional $12.5m investment in build-to-rent and a further $16.2m over four years in frontline homelessness services.
Housing affordability
The Budget includes several new and expanded initiatives including the following:
- expansion of the Affordable Community Housing Land Tax Exemption Scheme and support for Build-to-Rent projects including affordable rental housing, and
- continued funding to support the delivery of public housing, including through the Housing Australia Future Fund and Social Housing Accelerator.
ACT Infrastructure Plan
The $8.1bn ACT Infrastructure Program includes $5.8bn investment in the General Government Sector and $2.3bn by Public Trading Enterprises over the five years to 2029-30.
The 2025-26 Infrastructure Investment Program is delivering on the priorities identified in the seven sectors of the Infrastructure Plan, continuing investment in key Canberra regions to enhance community wellbeing and support urban growth. Over the five years to 2029-30, the Government has committed to:
- more than $830m on health infrastructure
- more than $790m on education and skills infrastructure
- more than $2bn on public transport, roads and active travel
- more than $710m for entertainment, arts and sport
- more than $400m for city services, recreation and community facilities
- more than $620m on housing infrastructure, and
- more than $210m on climate action and environmental infrastructure.
The takeaway
The 2025-26 ACT Budget continues to progress its tax reform program, transitioning away from transaction-based taxes with reforms increasing general rates and reducing stamp duty. The Budget also introduces a Health Levy, while allocating $8.1bn for infrastructure in health, education, and transport. Prioritising affordable housing, the Budget plans for 30,000 new homes by 2030 with increased funding for housing initiatives.
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