Client Alert

Unpacking announcements from the Victorian State Budget 2026-27

By:
Kristina Popova,
Nick Mellos
06 May 20264 min read
On Tuesday 5 May 2026 Victoria’s Treasurer, Jaclyn Symes, delivered the State Budget alongside Premier Jacinta Allan.

The budget delivered a $727m operating surplus in 2025-26, which would be the first budget surplus in more than 5 years. A $1.05b surplus is projected in 2026-27.

Net debt is forecast to be approximately $175.6b in 2026-27 and will continue to rise, with it estimated to reach $199.3b by 2029-30. Interest costs are approaching $9b per year. Unemployment remains below the long-term, pre-pandemic average, currently sitting at 4.8 per cent.

Key risks to the current economic outlook include global uncertainty, higher interest rates and cost of living pressures.

Key highlights

  • A further $860m over 5 years to the Social Housing Growth Fund, aimed at building more than 7,000 additional social houses over the next 10 years and $9.8m for fast-tracking housing projects through the Development Facilitation Program.

  • $750m towards 20 per cent rebates on vehicle registrations from 1 June-31 July.

  • $459m towards training for in-demand skills, including subsidising up to 80 priority TAFE courses.

  • $433m on free public transport in April and May, followed by half-price fares until 1 January 2027.

  • $397m to implement bail laws and $222m for policing and community safety funding for programs and recruitment of extra 200 police to police stations.

  • $284m for opening and operating hospitals, including $10m for improving ambulance transfer times in emergency departments during peak periods. 

  • $97m on housing reforms, including $37m for using Victorian land.

  • $92m to improve train services on the Shepparton line and increasing further capacity on lines that run through Clifton Hill and Burnley.

  • An additional $80m for residential and aged care facilities.

  • $73m to regional road upgrades across Victoria.

  • $28m in extending the Solar Victoria hot water program.

  • $14m towards Victoria’s AI Investment Package, which is aimed at safe AI adoption and workforce transition. 

Revenue measures

With no new taxes introduced, the Victorian Budget has forecasted an increase to tax revenue collection of $43b in 2026-2027 and expecting to increase to $50b by 2029-2030.

Land tax revenue is projected to generate $6.5b in revenue in 2027 and stamp duty is expected to reach $10b – a downgrade in the last Budget’s forecast of $10.6b. This downward forecast has been attributed to a decline in property market and rising interest rates stifling market price growth.

In this year’s budget, announced changes to duty and payroll tax thresholds include:

  • From 1 July 2027, green passenger vehicles above the luxury car threshold will no longer be charged a lower rate of motor vehicle duty when compared with other standard passenger vehicles. 
  • The temporary land transfer duty concession for off-the-plan apartments, townhouses, and units will be extended for an additional six months. The concession will now apply to contracts signed on or after 21 October 2024 and before 21 April 2027.
  • For non-government schools, from 1 July 2026, the income per student threshold exemption for payroll tax has been increased from $15,000 to $16,397. The income per student threshold will continue to increase each year in line with the School Resourcing Standard amount for secondary students determined and published by the Commonwealth Government.

If you wish to discuss the above budget announcements, please reach out to a Grant Thornton Partner today.

TAGS  
Authors
  • Kristina Popova Kristina specialises in advising clients on all aspects of transactions from a revenue law perspective across all Australian States and Territories. This includes stamp duty, land tax and foreign surcharges. View Profile
  • Nick Mellos Nick is a Registered Trustee in Bankruptcy and is one of the few practitioners in Australia to specialise in Personal Bankruptcy and Part X arrangements. Nick has extensive Personal Insolvency experience and will always use his best endeavours to reach a commercially viable outcome for all stakeholders. Nick also provides financiers with an investigative review of an individual's financial position, so that a comparison can be made to bankruptcy when compromising debts. View Profile

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