Overview
Each State and Territory has now released their Budgets for the 2025/2026 year. There is a theme across the States and Territories of promoting housing affordability and delivery, and of cost of living relief. There have been some relatively minor adjustments to land tax, stamp duty and payroll tax across the board. Tweaks to existing “Build to Rent” (BTR) concessions have also featured in many jurisdictions. This overview will only look at the stamp duty and land tax related changes.
In terms of more significant changes:
- Victoria has introduced amendments to its Commercial and Industrial Property Tax (CIPT) regime;
- New South Wales, Victoria, and Western Australia have proposed expansions or changes to the existing BTR land tax concessions; and
- Queensland is proposing to introduce a new “windfall duty” that may apply if certain foreign surcharges are held to be constitutionally invalid or inoperative, and a taxpayer seeks to recover the amount of tax they have paid.
A brief summary of some of the key changes is provided below, followed by a spotlight on some of the more notable changes across Victoria, New South Wales and Queensland.
Summary
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Tax measure overviews
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INDIVIDUAL
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Example
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VIC
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Stamp duty The temporary off-the-plan concession announced in October 2024 (originally for 12 months) has been extended for a further 12 months to apply to contracts signed after 21 October 2024 and before 21 October 2026. The concession is available to purchasers on off-the-plan apartments or townhouses within a strata subdivision that also creates common property. This concession can apply to all purchasers, including investors, and there is no threshold for the concession to apply. There were also some changes related to eligibility for first home buyer concessions related to instances of family violence. Land tax The land tax treatment of BTR developments has been modified, altering the eligibility criteria and providing a new discretion to the Commissioner. Refer below for more detail. There are also new exemptions including in relation to persons affected by family violence and expanded exemptions from land tax for land used and occupied as a person’s principal place of residence despite their absence from the land if certain criteria are met, and other miscellaneous amendments. Commercial and Industrial Property Tax Under the CIPT reforms, commercial and industrial properties will move into a new system following their next sale and will pay land transfer duty one last time. There have been various amendments in relation to certain aspects of the CIPT regime which are outlined in more detail below. New Recklessness behaviour base penalty There is a new base penalty tax rate of 50% for tax and notification defaults due to the recklessness of the taxpayer or someone acting on the taxpayer’s behalf. This applies to tax defaults and notification defaults from 25 June 2025. |
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NSW
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Land tax The Budget proposes to extend the BTR land tax concession, including allowing owners of new BTR developments to apply for a 50% reduction in land value for land tax purposes indefinitely. This would extend the existing concession that currently has an end date of 31 December 2039 and applies from the 2026 land tax year, subject to eligibility requirements. However, developments that are already receiving the BTR land tax concession for the 2025 land tax year or prior years are proposed to be ineligible for the extended concession. Refer below for more detail. |
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ACT
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Stamp duty The ACT is continuing to phase out stamp duty and replace it with general rates. From 1 July 2025, the Budget proposes that price thresholds for key stamp duty concessions will be adjusted in line with Canberra’s consumer price index. The property price threshold for Off-the-Plan and RZ1 Unit duty exemption schemes is proposed increase to $1.02m for 2025-26. Land Tax The 2025-26 ACT State Budget announced a proposal to increase in the property cap of the Affordable Community Housing Land Tax Exemption Scheme from 250 to 1,000 properties. This scheme 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. No amending Bill has been released in the ACT at this stage. |
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QLD
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Windfall Duty / Windfall Tax (collectively referred to as Windfall tax): Foreign surcharges New windfall tax provisions are proposed to apply in relation to stamp duty and land tax in circumstances where provisions imposing Queensland foreign surcharges are determined to be constitutionally invalid or inoperative. Refer below for more detail. Streamlining of ex gratia relief from foreign surcharges Announced they will be spending an estimated $47 m over the next 4 years to implement administrative changes to improve processing for ex gratia relief from the duty and land tax foreign surcharges. Transfer duty Transfer duty has been abolished for first home buyers purchasing a new build or vacant land from 1 May 2025 subject to various eligibility requirements and conditions. This measure, whilst included in the 2025/2026 Budget, has already been passed in an earlier amendment Act. |
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WA
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Transfer duty The Government has extended the off-the-plan transfer duty concession by 12 months, from 30 June 2025 to 30 June 2026. This is not limited to first home buyers. Additionally, for eligible pre-construction and under construction transactions, the Government has made the concession more generous by expanding the concession to off-the-plan dwellings on single-tier strata schemes and community title schemes (for agreements entered into between 31 March 2025 and 30 June 2026) and increasing the concession’s lower and upper thresholds to $750,000 and $850,000 respectively for agreements entered into between 21 March 2025 and 30 June 2026. There have also been increases to the various value thresholds eligible for the first home owner duty exemption or concession. Land tax The land tax exemption for eligible BTR projects that become operational between 1 July 2025 and 30 June 2028 is proposed to increase from 50% to 75%. Refer below for more detail. |
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SA
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Land tax The land tax system incorporates a tax-free threshold and marginal rates of tax at various threshold values of aggregate land ownerships. The relevant land tax thresholds for 2025-2026 will increase by around 13.8%. This means the general tax-free threshold for land tax will increase to $833,000 and the top tax rate threshold will increase to $3.116 million. |
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TAS
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Stamp duty The 2025/2026 budget that was released on 29 May 2025 did not contain any stamp duty or land tax changes. However, we note that due to the prorogation of the Tasmanian Parliament on 11 June, the status of this budget is uncertain. |
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NT
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Stamp duty and payroll tax The eligibility criteria for the charity and non-profit entity payroll tax and stamp duty exemptions have been broadened. |
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Further detail
Commercial and Industrial Property Tax in Victoria
Under the CIPT reforms, commercial and industrial properties will move into a new system following their next sale and will pay land transfer duty one last time. Land enters the CIPT regime and becomes “tax reform scheme land” if there is an entry transaction, an entry consolidation or an entry subdivision. An entry requires land to have a “qualifying use” among other things.
New provisions have been enacted which authorises the Commissioner to request a valuation of the land so it can be allocated an Australian Valuation Property Classification Code (AVPCC) or to provisionally determine that land has a qualifying use. This appears to deal with an issue identified by practitioners where settlements have been held up due to an AVPCC not having been issued.
There are also amendments in relation to deeming principles to be applied for the duty exemptions for land that has entered into the CIPT regime (Tax Reform Scheme Land) and have been subdivided and also in relation to the application of the landholder provisions where Tax Reform Scheme Land is held.
Build to Rent changes
New South Wales
The Budget proposes to introduce a permanent land tax concession of a 50% reduction in assessed land value for new BTR developments (Indefinite BTR concession period). The requirement that a proportion of labour force hours for construction be performed by specified classes of workers is also proposed to be removed (Labour requirement).
The budget statements also outline that:
- BTR developers will be able to apply for exemptions from foreign purchaser duty and land tax surcharges (or a refund of surcharges paid) – which is also currently available under the existing BTR concessions; and
- developments that are already receiving, or applied for, the BTR land tax concession for the 2025 land tax year or prior years are ineligible to receive the extended concession.
There is little additional detail as to whether the reference to the ineligibility to the ‘extended concession’ for existing BTR developments applies to only the Indefinite BTR concession period, or whether it will also to the Labour requirement as there is no amendment bill is available on this change as yet.
Victoria
The definition of an eligible BTR development has been modified. Dwellings must now be ‘genuinely offered for rent’ instead of being ‘available for rent’ under a residential rental agreement, to ensure the active promotion of long-term residential options.
As part of this, there are amendments to the required rental terms, which are intended to reinforce that owners have genuinely provided long-term rental options and include documentation requirements. The amendments require that parties must complete a declaration (in a form to be determined by the Commissioner) that a long-term rental option was genuinely offered but a shorter term was agreed to at the specific request of the renter. A copy of this declaration must be produced by the owner if requested to do so by the Commissioner.
There is also a concept of a new minimum term for residential agreements that can be prescribed in the Regulations. It would appear that original intent was that the minimum term will be 12 months even if the tenant requests otherwise. However, the original bill was amended to allow flexibility. Regulations on this point have not yet been released.
The Commissioner also has a new discretion to allow taxpayers to continue to receive BTR benefits where a dwelling may no longer satisfy certain requirements in relation to the occupancy of a dwelling. This is where the dwelling is temporarily uninhabitable and the Commissioner considers it reasonable in the circumstances to disregard the non-satisfaction of the requirement.
These Victorian changes have been legislated.
Western Australia
The expanded 75% BTR land tax exemption is proposed to apply for the first three assessment years only, after which the exemption will revert to its original setting of 50%. For example, if passed, this means that 2030-2031 year will be the final year when a 75% land tax exemption can be applied to an eligible project that became operational in 2027-2028.
No amendment bill has been made available at this stage.
Windfall tax in Queensland
Foreign persons who acquire or own land in Queensland may be subject to duty and land tax foreign surcharges, referred to as additional foreign acquirer duty (AFAD), and land tax foreign surcharge (LTFS) (foreign surcharges).
The validity of imposition of these foreign surcharges was subject to a period of uncertainty and various statutory amendments were introduced as revenue protection mechanisms the Revenue Legislation Amendment Act 2025 (RLAA).
The Windfall tax amendments are a further protection mechanism and will only apply if the foreign surcharge provisions and the RLAA revenue protection provisions are determined to be invalid or inoperative because of constitutional reasons, to the extent they apply to certain foreign surcharge liabilities.
The Windfall tax provisions will have application from the day that the relevant court decides the invalidity or inoperativeness (the decision day).
If the Windfall tax provisions apply, a taxpayer will be entitled to an AFAD or land tax windfall (Tax Windfall) if they have been given an assessment of a foreign surcharge liability arising before 8 April 2024 and the foreign surcharge, as it applied in relation to their transaction or land, is invalid because the relevant imposition provisions were to any extent constitutionally invalid or inoperative.
However, the windfall tax will only be imposed on taxpayers who claim an entitlement to a Tax Windfall, for example, by seeking a refund to reduce their foreign surcharge liability to nil. The amount of the windfall tax will be equivalent to the taxpayer’s relevant foreign surcharge liability (plus penalty tax and interest assessed or paid).
A windfall tax liability will generally not be imposed on taxpayers that accept their foreign surcharge liability and is imposed only as an alternative to foreign surcharge liability.
These provisions have been legislated.
