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By: Kristina Popova, Nick Mellos
21 May 2025 4 min read
$1.3b to increase access to education including free Kinder for three- and four-year-olds, and subsidising courses at TAFE.
$976m to upgrade roads, maintain bridges and fix potholes, including $412m for the next phase of the Road Safety Action Plan.
$529m for healthcare including mental health support and 12 Urgent Care Centres.
$318m in free public transport for children under 18 years old.
$150m for the Victorian Investment Fund aimed at growing priority sectors including advanced manufacturing and defence and digital technologies, with $50m towards jobs and investment in regional Victoria.
$61m to remove stamp duty for off-the-plan apartments, units and townhouses for an additional 12 months.
An additional $4m to support the Mortgage Stress Victoria program.
For the first time in five years, the state reported an operating surplus at $600m, with projected surpluses of $1.9b in 2026–27, $2.4b in 2027–28, and $1.5b in 2028–29. Net debt is $167.6b, with it forecasted to increase to $194b by 2028-29.
The unemployment rate is 4.4 per cent and is expected to rise to 4.75 per cent in 2025-26, remaining below the pre-pandemic average of 5.5 per cent. Real economic growth is estimated to be 2.5 per cent in 2025-26, with an increase in real household income.
Separately, the Treasurer mentioned there would be no further taxes on businesses.
Some key revenue measures include extending the stamp duty concession on eligible off-the-plan apartments, units and town houses until October 2026. Prior to October last year, the concession for off-the-plan was only available to first homeowners and for eligible properties below the value of $750,000. The stamp duty concession is now extended to any person seeking to buy an eligible off-the-plan property for any value for a further 12 months.
Although no new taxes were announced, the government has confirmed previously announced tax measures in its budget papers including the Emergency Services and Volunteers Fund levy and increases to the Congestion Levy, which is expected to bring in $222m in revenue in 2025-2026 year to the Victorian economy.
As announced in December last year, from 1 July 2025, the Fire Services Property Levy will be replaced by the Emergency Services and Volunteers Fund (ESVF). The ESVF will be calculated as a fixed charge depending on the type of property and an increased variable charge component calculated on the property value. The variable charge will approximately double for residential properties from 8.7 cents per $1,000 of capital improved value, to 17.3 cents and more than tenfold increase for primary production land from 5.7 cents for primary production properties to 71.8 cents. A consequence of the ESVF will be changes to classifications of property types, with the vacant land category being abolished and will be reclassified as industrial land.
A Congestion Levy is imposed to off-street private and public parking spaces in inner Melbourne. The aim of the levy is to reduce traffic congestion and encourage public transport use. The levy rate for the 2025 calendar year is $1,750 for parking spaces in Category 1 area and $1,240 for spaces in Category 2 area. These rates will increase in 2026 calendar year to $3,030 and $2,150 respectively and the rates will be indexed annually in accordance with the consumer price index each year after. An exemption to the Congestion Levy for parking spaces on government school premises will apply, which follows similar exemptions for non-government schools, hospitals, universities, libraries and museums.
If you wish to discuss the Victorian Budget announcements, please reach out to a Grant Thornton Partner today.
Under Australia's new CGT rules, many assets will need a market value as at 1 July 2027. Learn when a professional valuation may be worth the cost compared to using the legislated shortcut method.
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Grant Thorton’s submission on the draft legislation for the minimum 30% tax on discretionary trusts shines a light on the punitive outcomes, inflexibilities, complexities, conflicts with small business CGT concessions, and other anomalies that will arise for the small-to-medium business sector and private groups.
