In brief
The 2026-27 Western Australian Budget (Budget) was delivered on 7 May 2026 by the Western Australian (WA) Treasurer, the Hon. Rita Saffioti MLA.
The Budget introduces a suite of measures aimed at shielding WA households from rising global uncertainty and cost pressures arising from the Middle East conflict, and is framed around policy decisions designed to “protect” and “cushion” households against these impacts. Despite this backdrop, WA's economy is described as “resilient”, with an operating surplus forecast of $3.5 billion in 2025-26 and $2.4 billion in 2026-27.
Among the revenue measures announced is a $297 million Housing Taxation Package, which:
- extends stamp duty relief for first home buyers, lifting the exemption and concession thresholds for both established homes and vacant land;
- extends the off-the-plan transfer duty concession by two years and broadens its scope to capture additional dwelling types (such as units and villas, alongside apartments and townhouses);
- delinks the first home owner rate of duty from the First Home Owner Grant (FHOG), so that first home buyers acquiring vacant land within the concession thresholds receive the concession regardless of their FHOG eligibility; and
- introduces a new foreign buyers duty exemption for locally based builders with foreign ownership who are adding to housing supply (noting this differs from existing exemptions offered by the Government which apply only to significant developments of ten or more dwellings).
In detail
State finances
Despite the International Monetary Fund’s revision of global economic growth to 3.1%, WA’s domestic economic growth has been revised up to 3.5% in 2025-26. The Budget Papers point to the resilience of WA’s economy as a key factor for this growth, with strong private sector activity and business investment predominantly accounting for this (85%), notwithstanding heightened geopolitical tensions in the Middle East, ambiguity over the US trade policy and slowing of economic growth in China.
In this context, the WA Government has self-proclaimed its economy as the “nation’s powerhouse”, accounting for over 45% of total national exports (growing to $238.4 bn over the year to February 2026). WA continues to be the only State or Territory holding a triple-A credit rating from both Moody's Ratings and S&P Global.
General government revenue in WA is forecast to total $55bn in 2026-27, an estimated increase of 4.4% from 2025-26. This is a slower rate of revenue growth than the 6% estimated for 2025-26, due to a decline in transfer duty receipts (given fewer large commercial transactions, lower sales in the established property market and more modest house price growth) and lower royalty income expected from iron ore. Notably, the growth is underpinned by the State's GST relativity lifting from the 75% floor in 2025-26 to 82% in 2026-27 (taking GST grants to $9.3bn), additional Commonwealth funding under the National Health Reform Agreement ($306m), expected increases in taxation revenue (with solid employment and wages growth flowing through to higher payroll tax) and a one-off lift in public corporation dividends.
Expenses are projected to grow 6.9% in 2026-27 to $52.5bn, supporting significant additional spending across health, mental health, housing, education and community services. The $44.3bn Asset Investment Program over the four years to 2029-30 includes $13.2bn in 2026-27. Total public sector net debt is expected to rise from $34.5bn at 30 June 2026 (7.1% of GSP) to $44.0bn at 30 June 2030 (8.9% of GSP), with the Government noting that this remains the lowest debt burden of any Australian jurisdiction.
Taxation revenue
Total taxation revenue is forecast to consolidate at $16.9bn in 2026-27, a modest decrease of 0.6% (or $104m) on the estimated 2025-26 outturn of $17.0bn. This follows projected growth of 14.6% in 2025-26 and 8.9% in 2024-25. The forecast decline primarily reflects an expected fall in transfer duty from large commercial transactions (which were unusually high in 2025-26) and an easing in property market conditions, partly offset by continued solid growth in payroll tax (consistent with strong labour market conditions) and in land tax (supported by a strong increase in residential land values). Across the forward estimates, taxation revenue is forecast to grow at an average annual rate of approximately 4.7%, reaching $19.4bn in 2029-30.
Notable items underpinning the 2026-27 taxation forecasts include payroll tax of $6.5bn (up from $6.2bn in 2025-26), transfer duty of $3.6bn (down from $4.3bn in 2025-26), land tax of $1.3bn (up from $988m in 2025-26, with the Metropolitan Region Improvement Tax adding a further $158m), insurance duty of $1.1bn and motor vehicle taxes of approximately $2.4bn. Royalty income is forecast to fall to $9.4bn in 2026-27 (down from $10.8bn in 2025-26), with further declines in subsequent years on the iron ore price normalisation assumption.
Revenue measures
As mentioned above, the Budget included a $297 million Housing Taxation Package targeted at strengthening first home buyer assistance and supporting increased and more diverse housing supply. The measures under this package are summarised below.
First home owner rate of transfer duty
For transactions entered into on or after 7 May 2026, first home buyers will benefit from increased exemption and concession thresholds for both established homes and vacant land. The Budget estimates this measure will reduce transfer duty revenue by $197.4m over the period 2025-26 to 2029-30 and support around 6,000 first home buyers into home ownership per annum. The new and superseded thresholds are summarised in the table below.
| Property type | Previous threshold | New threshold (from 7 May 2026) |
| Established home - full exemption | Up to $500,000 | Up to $600,000 |
| Established home - concessional rate | Up to $700,000 (Perth and Peel) / $750,000 (other regions) | Up to $800,000 (statewide) |
| Vacant land - full exemption | Up to $350,000 | Up to $450,000 |
| Vacant land - concessional rate | Up to $450,000 | Up to $550,000 |
Off-the-plan transfer duty concession
The off-the-plan transfer duty concession, which had been extended in the 2025-26 Budget to 30 June 2026, has been extended for a further two years to 30 June 2028. This iteration of the concession (relevant for transactions entered into on or after 12 March 2026) has been expanded such that classes of dwellings previously not included within scope (e.g., units and villas) can now benefit from relief. Further, the lower and upper property value thresholds have been increased from $750,000 and $850,000 to $800,000 and $900,000 respectively.
For eligible pre-construction contracts, the concession is now a 100% concession on properties valued up to $800,000, phasing to a 50% concession for properties valued at or above $900,000 (capped at $50,000). For eligible under-construction contracts, the concession phases from 75% to 37.5%. The measure is estimated to reduce transfer duty revenue by $73.1m over the period 2025-26 to 2029-30 and is expected to encourage greater housing choice, including for seniors looking to downsize.
Delinking eligibility between the first home owner rate of duty and FHOG
Under previous arrangements, eligibility for the first home owner rate of duty on a purchase of vacant residential land was linked to the FHOG property value cap. This resulted in many first home purchasers of vacant land being ineligible for a duty concession where the combined value of the land and related construction costs exceeded the FHOG cap (which is increasing from $750,000 to $800,000). For transactions entered into on or after 7 May 2026, this connection will be removed, ensuring that first home buyers purchasing vacant land within the duty concession thresholds will receive the concession as intended (regardless of FHOG qualification). The measure is estimated to reduce transfer duty revenue by $10.7m over the forward estimates and to support around 340 additional first home buyers per annum.
Foreign buyers duty exemption for builder-sellers
The Budget includes a new exemption from additional foreign purchaser duty (7%) for locally-based builders with foreign ownership adding net new dwellings to housing supply. This exemption applies from 7 May 2026, and is “designed to support residential development activity that adds to (WA) housing stock”. To qualify for the exemption, the locally-based foreign buyer must construct and sell new dwellings within two years of the original purchase date.
The Government has highlighted a number of development activities intended to qualify for this exemption, including:
purchasing vacant land and constructing one or more dwellings;
purchasing and completing partially constructed dwellings;
purchasing land with an established property where more dwellings will be constructed than demolished; and
repurposing or refurbishing commercial or industrial buildings into residential dwellings.
The measure is estimated to reduce foreign buyers duty revenue by $1.6m over the forward estimates. Importantly, this exemption differs from existing exemptions offered by the Government, which apply only to significant developments of ten or more dwellings.
Additional compliance and debt management funding
Separately, the Budget allocates an additional $2.6m over 2026-27 and 2027-28 for compliance and debt management activities to support the administration of State taxes. This is expected to generate an additional $65m in taxation receipts (net of resourcing costs) by 30 June 2030. Taxpayers should expect a sharper compliance focus from Revenue WA over this period, particularly in respect of payroll taxes, transfer duty and land tax obligations.
Key Budget fund allocations
Beyond the Housing Taxation Package, the Budget commits significant new spending across the Government's priority areas. Headline allocations include:
- Housing supply and affordability ($4.7bn): including $1.5bn to deliver and refurbish 1,806 social and affordable dwellings, $1.3bn to directly increase residential land supply, $500m for industry to deliver affordable home ownership options (including a $250m “Presales Finance Guarantee” and a $250m “First Home Buyer Commercial Financing Facility”) and $672m for regional housing.
- Health and mental health ($9.1bn): including $6.5bn for hospital services, $281.7m to increase mental health supports and services, $214.1m for a hospital maintenance package and a further $500m allocation to the Building Hospitals Fund.
- Cost-of-living relief (over $1bn): including $198m for a one-off $100 Fuel Support Payment for all Western Australians with a valid driver's licence, $90m for the WA Student Assistance Payment ($150 per primary or kindergarten student and $250 per secondary student) and continued capping of household fees and charges below inflation.
- Energy and economic diversification ($2.6bn): investments including a Kalgoorlie Vanadium Battery Energy Storage System, Green Iron and Steel funding, an Investment Attraction Fund top-up and PoweringWA to support the State's energy transition.
- Construction workforce and housing innovation: $51m to expand the construction workforce (including additional Group Training Organisation Wage Subsidy places, the Construction Visa Subsidy and Build a Life programs, and continued low or fee free TAFE construction training) and $48m to establish two Housing and Infrastructure Advanced Manufacturing Facilities at Kwinana and Neerabup.
The takeaway
The Budget’s key revenue measures are concentrated on the residential property market. First home buyers, off-the-plan purchasers (including downsizers) and foreign-owned builder-developers are the principal beneficiaries of the higher first home buyer thresholds, the broadened off-the-plan concessions, the delinking of duty relief from FHOG eligibility on vacant land, and the new foreign buyer’s duty exemptions for builder-sellers. No significant new revenue-raising measures have been announced.
Contact us
For further information on how these measures may affect you or your business, please contact your PwC adviser or one of the contacts listed below.
Matthew Sealey
Partner, Financial Advisory - Tax, PwC Australia
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