Australian Capital Territory budget: a focus on reducing the deficit

Australian Capital Territory Treasurer Chris Steel delivered his first budget on Thursday 24 June alongside Chief Minister Andrew Barr. 

The first budget for the re-elected government delivered a $1.1b deficit for 2024-25, which is forecasted to drop to a deficit of $424.9m for 2025-26 before reaching a projected surplus of $330m by 2028-29. 

Net debt is estimated to be $9.2m in 2024-25, reaching $13.6m by 2028-29. Unemployment remains low signalling a tight job market, and GSP growth is forecast to be 3.5% in 2024-25, increasing to 3.75 per cent by 2028-29. 

Revenue measures 

Unlike some other State budget counterparts, the ACT’s Budget introduced a new levy, and saw increases to a number of existing rates and levies. The Budget also included expansions to existing land tax and stamp duty concessions. 

These include:

• Introduction of a four year temporary $250 Health Levy to contribute to the financial sustainability of the health system. This will be imposed as an additional levy to rates notices paid by residential, commercial and rural property owners.
• An increase to the Safer Families Levy by $10 to $60 in 2025-2026 and Police, Fire and Emergency Services Levy to $426, being a $30 increase.
• Increases to the Lifetime Care and Support Levy from $105.40 to $110.40 and Road Safety Contribution Levy to $3.20. 
• Increases to the general rates in 2025-2026 by 3.75 per cent for residential and commercial properties and 3.25 per cent for rural properties.
• Introduction of new land threshold and higher rates for residential land with an average unimproved value above $1m and high value commercial properties with unimproved land value of $5m.
• Reduction of the tax-free payroll tax threshold to $1.75m. However, this change will also be accompanied by a reduction in the initial payroll tax rate to 6.75 per cent.
• Reduction in motor vehicle duty concessions for zero emission vehicles.

Other revenue measures that will assist ACT taxpayers include:

• Increasing the property price threshold for stamp duty concessions to $1.02m for off-the-plan and RZI Unit duty exemptions.
• Expansion of the number of Affordable Community Housing Land Tax Exemption Scheme properties from 250 to 1,000. This will allow more property owners to access a full land tax exemption if they rent their properties to eligible tenants, such as low income earners, through a registered community housing provider at less than 75 per cent of the market rent.

If you wish to discuss the Australian Capital Territory State Budget announcements, please reach out to a Grant Thornton Partner today.