In brief
The 2026-27 Tasmanian Budget was delivered on 21 May 2026 by Treasurer Eric Abetz. This Budget focuses on providing support for cost of living, healthcare and housing, including a temporary increase to the First Home Owners Grant and continuing free public transport to 30 June 2027. There are no new or increased State taxes and the previously announced Short Stay Levy is proposed to commence on 1 July 2026.
In 2026-27, the Net Operating Balance is forecast to be a deficit of $597m in 2026-27, returning to surplus in 2027-28 and growing to $622m in surplus by 2029-30. Net Debt is projected to peak at $9.983bn in 2028-29 before reducing.
In detail
Budget expenditure
The key expenditure allocations include:
Health: $15bn investment over the Budget and Forward Estimates, including investments into emergency departments, community health and hospitals across Tasmania.
Social protection: increasing expenditure to $6.5bn across the Budget and Forward Estimates to support child safety, disability, housing and community services.
Infrastructure: $4.9bn investment in infrastructure investment over four years, including roads and bridges ($1.7bn), hospitals and health ($704m), law and order ($300m), schools, education and skills ($328m) and tourism, recreation and culture ($162m).
Housing: $900m over the next four years into delivering more social and affordable homes, and a temporary doubling of the First Home Owner Grant from $10,000 to $20,000 for 12 months from 1 July 2026.
Cost of living: $370m for concession card holders over four years including discounts, concessions and subsidies for electricity, water and sewerage bills. Free public transport has also been extended for another 12 months.
Budget revenue forecasts
The Budget projects a net operating deficit of $597m in 2026-27 and forecasts the Net Operating Balance to return to surplus in 2027-28. Revenue for 2026-27 is forecast at $10.2bn, mainly comprising GST revenue ($4.108bn), Australian Government grants ($2.648bn), State taxation ($2.132bn) and the balance from sales of goods and services, fines and regulatory fees, interest income and other revenue sources.
As part of its Budget Improvement Agenda, the Government has set three Targets in its Fiscal Strategy to achieve by 2028-29 including reaching peak Net Debt by having a zero Net Borrowing requirement, reducing Public Non-Financial Corporations Sector Net Debt by $500m based on the 2025-26 Budget and capping Total Infrastructure Investment Funding and Other Equity Injections at $1bn.
State tax revenue
State taxation revenue is forecast at $2.132bn in 2026-27, an increase of $199.8m (10.3%) compared with the 2025-26 Budget. Across the Forward Estimates, State taxation revenue is projected to grow at a compound annual growth rate of approximately 5%, driven primarily by payroll tax and conveyance duty growth from Tasmania’s growing labour and property markets. No new tax bases or rate increases were announced.
State tax measures announced in the Budget
First Home Owner Grant
The First Home Owner Grant for the construction or purchase of a new home will be temporarily increased from $10,000 to $20,000 for eligible transactions entered into during the 12 months from 1 July 2026. Eligibility criteria has remained the same, including requirements that the home be a new home and the applicant occupy the property as their principal place of residence for at least six months commencing within 12 months of completion.
Short-stay accommodation levy
The Short Stay Levy Bill 2026 introduces a 5% levy on the booking value of short-stay accommodation provided through booking platforms. The Bill passed the House of Assembly on 7 May 2026 and remains before the Legislative Council. Subject to passage through Parliament and Royal Assent, the levy is proposed to commence on 1 July 2026.
The takeaway
The 2026-27 Tasmanian Budget seeks to strengthen the Tasmanian Government’s fiscal position while providing relief for cost of living pressures and improving accessibility to healthcare and housing. It does not impose any new or increased State taxes and the main headline taxation initiatives include the temporary doubling of the First Home Owner Grant and the previously announced Short Stay Levy, proposed to commence on 1 July 2026.
Short-stay accommodation operators and booking platforms should monitor the passage of the Short Stay Levy Bill 2026 through the Tasmanian Parliament and prepare systems for collection and remittance. Businesses operating in Tasmania should otherwise expect continuity in payroll tax, land tax and duty settings, with bracket creep alone driving most of the forecast revenue growth.
Contact us
For further information on how these measures may affect you or your business, please contact your PwC adviser or the contact listed below.
Ilyas Elahi
Managing Director, Tax, PwC Australia
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