In brief
The 2025-26 Queensland State Budget (the Budget) was delivered on 24 June 2025 by Treasurer David Janetzki.
The Budget has a focus on infrastructure with $116.8bn allocated to capital projects over four years, based on an assessment of current and future infrastructure needs to support a growing population. In addition, the newly elected Government is seeking to strengthen initiatives in housing, healthcare, safety, and reducing living expenses for families.
As temporary cost-of-living relief measures are wound back from last year’s budget, the Government expects the net operating deficit to deteriorate in 2025–26 before gradually improving as revenue is forecast to grow faster than expenses from 2026–27 onwards. Over the period from 2024–25 to 2027–28, the operating position is forecast to improve by $6.1bn compared to earlier estimates.
In detail
Revenue measures
The Budget included a number of tax related changes and initiatives, with the Revenue and Other Legislation Amendment Bill 2025 being introduced to effect some of the below measures.
Payroll tax relief for apprentices and trainees
The 50% payroll tax rebate for wages paid to apprentices and trainees will be extended for 12 months, until 30 June 2026. This measure applies to businesses with annual Australian taxable wages of $1.3m or more and is expected to deliver $58.1m in tax relief to eligible businesses in 2025–26. It is provided in addition to the general payroll tax exemption for apprentice and trainee wages.
Payroll tax exemption for general practitioners
The Government is introducing a permanent payroll tax exemption for payments by medical practices to both contracted and employed general practitioners. This measure has been described by the Government as aiming to support the essential role of general practitioners, make Queensland more attractive to general practitioners, protect access to bulk billing, and help address rising healthcare costs. It is forecast to cost an estimated $130m per year in foregone revenue.
Ex gratia relief for foreign surcharges process
The process for ex gratia relief from the land tax foreign surcharge and additional foreign acquirer duty is intended to be streamlined and simplified. Currently, the existing ex gratia guidelines provide for the availability of ex gratia relief to Australian-based foreign entities that contribute to residential housing development or the local economy and community, subject to specific thresholds. However, significant processing times of between one to two years and a narrow interpretation and application of the existing guidelines have led to limited instances of ex gratia relief being granted for property development, or significant delays in the granting of such relief.
Administrative improvements will aim to provide greater certainty and timely consideration of the applications, contributing to broader efforts to increase housing supply and affordability. The government will consult with industry to identify and implement appropriate changes to the ex gratia eligibility criteria to support new housing development, through the newly re-established property Consultative Committee. Details are intended to be developed and finalised by the end of 2025.
Windfall tax provisions
The Duties Act 2001 (Qld) and Land Tax Act 2010 (Qld) are being amended to introduce ‘windfall tax’ provisions, which seek to impose windfall duty or land tax in circumstances where provisions imposing Queensland foreign surcharges are found to be constitutionally invalid or inoperative. These windfall taxes have been described as a revenue protection measure and essentially seek to prevent refunds in the event of a successful legal challenge under section 109 of the Commonwealth Constitution.
The government has noted that this tax serves as an alternative, not an addition, to the foreign surcharge and will not apply to taxpayers who accept their foreign surcharge liability. The amount of windfall tax will match the original foreign surcharge liability, including any penalty tax and interest. Additionally, the windfall tax will be administered under the Taxation Administration Act 2001 (Qld), with similar rights for objection and appeal, and will attract unpaid tax interest and penalties in line with standard tax administration practices.
Transfer duty for first home buyers of new homes
An already implemented measure, the Government reiterated that from 1 May 2025, first home buyers in Queensland no longer are required to pay transfer duty (stamp duty) when purchasing a new build or vacant land to build a home on. This applies to all new homes for first home buyers. A value cap of between $700,000 and $800,000 continues to apply for relief from duty on purchases of existing homes.
Trends in taxation and royalty revenue
The Government has estimated the General Government Sector revenue is predicted to total $91.337bn in 2025–26, up $1.861bn (2.1%) from 2024–25, with total revenue to then grow by an average of 3.9% across the three years to 2028–29. The Government estimates these to be as follows:
- Transfer duty is projected to reach $6.866bn in 2024–25, driven by record large transactions in late 2024 and a strong residential housing market. Revenue from large transactions is expected to normalise, but consistent activity in the housing market is expected to support solid average annual growth of around 5.5% over the next four years.
Revenue from other duties, such as vehicle registration duty and insurance duties, is expected to be $2.582bn in 2024–25, reflecting stable motor vehicle transactions and insurance premium growth, with an average annual growth rate of 5.1% forecast over the four years to 2028–29. - Land tax revenue is expected to be $2.465bn in 2024–25, reflecting strong land value growth across the state, though the immediate impact is moderated by a three-year averaging mechanism for land values. Sustained land value growth is anticipated to support continued increases in land tax revenue, with a strong average annual growth rate of 13.7% forecast over the four years to 2028–29, although this growth is expected to moderate as land prices stabilise.
- Total gambling tax and levy collections are expected to reach $2.179bn in 2024–25, which is $81.7m (3.9%) higher than in 2023–24, primarily due to ongoing growth in gambling activity in hotels and clubs. These collections are forecast to grow at an average annual rate of 4.3% over the four years to 2028–29.
- Other taxes, including motor vehicle registration, the emergency management levy, waste disposal levy, competitive neutrality fees, and other minor taxes, are expected to generate $2.081bn from motor vehicle registrations in 2024–25, which is $286.2m (12.1%) lower than in 2023–24 due to a temporary 20% reduction in registration costs for light vehicles. Motor vehicle registration revenue is expected to rebound by 21.4% in 2025–26 as the reduction ends, then grow by an average of 4.8% per year over the following three years. Revenue from other taxes excluding motor vehicle registration is estimated at $1.479bn in 2024–25, slightly lower than the previous year, with an average annual growth rate of 2.7% forecast over the four years to 2028–29.
The takeaway
Record spending on ‘generational’ infrastructure was the centrepiece of this year’s Queensland Budget, with other focus areas including housing, health and education. While tax measures did not feature heavily in the Budget, it did include the introduction of a new Windfall tax, which rather than seeking to raise new revenue, has been included in an effort to overcome the ongoing challenges to the constitutional validity of the foreign surcharges.
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