Key changes you need to know
As you gear up to lodge your 2025 tax return, it’s wise to be aware of the latest tax changes that could affect your bottom line.

The 2024–25 financial year brings some welcome tax relief for individuals, ongoing support for small businesses and a sharper focus from the ATO on compliance.

Here’s a clear rundown of what’s new and where to pay attention.

  • Tax rates stay friendly with cuts on the horizon
    For the 2024–25 year, the Australian resident income tax brackets remain as follows:
Table 1
Taxable income Tax rate Tax payable on this income
$0 – $18,200 0% Nil
$18,201 – $45,000 16% 16c for each $1 over $18,200
$45,001 – $135,000 30% $4,288 plus 30c for each $1 over $45,000
$135,001 – $190,000 37% $31,288 plus 37c for each $1 over $135,000
$190,001 and over 45% $51,638 plus 45c for each $1 over $190,000

These rates exclude the 2% Medicare levy.

Good news

  • Tax cuts for Individuals from 1 July 2026
    From 1 July 2026, the bottom tax rate will drop from 16% to 15% and then further to 14% from 1 July 2027. While these cuts won’t make you a millionaire overnight, they’re designed to ease bracket creep and offer ongoing cost of living relief, especially for low and middle income earners.
  • Instant asset write-off extended for small businesses
    If you’re a small business owner, here’s a bonus – the instant asset write-off for depreciating assets costing less than $20,000 was extended to 30 June 2025.
    The measure applies to small business with an aggregated turnover less than $10M and importantly the asset needs to be installed ready for use before 30 June 2025. This means eligible businesses can continue to immediately deduct the full cost of both new and used assets under $20,000, supporting cash flow and investment decisions.
  • Increased ATO focus on compliance and enforcement
    The ATO is ramping up its efforts to ensure everyone pays their fair share. The government has allocated nearly $1 billion over the next few years to boost compliance activities, including:

    • Expanding the Tax Avoidance Taskforce targeting large corporations and multinationals.
    • Tackling the shadow economy to reduce tax evasion and worker exploitation.
    • Enhancing personal income tax compliance programs.
    • Strengthening tax integrity programs to ensure timely paymen

    This means the ATO will be more vigilant than ever, so it’s best to keep your records clean and your lodgements timely.

  • Foreign resident capital gains withholding changes
    From 1 January 2025, the withholding rate on taxable Australian property disposals by foreign residents has increased from 12.5% to 15%. Also, from 1 January 2025 the previous $750,000 threshold has been removed, so all property transactions by foreign residents now fall under this regime unless a clearance certificate is provided.
    This change aims to improve compliance and close loopholes in foreign resident capital gains tax collection.
  • Energy bill relief payment
    To help with ongoing cost of living pressures, the government has introduced a one off $150 energy bill relief payment for individual taxpayers and small businesses with rebates from 1 July 2025 to the end of 2025. This small but welcome boost should help ease household budgets. Rebates will be applied automatically to your electricity bill in two $75 quarterly instalments.

What does this mean for you?

  • For employees and individuals
    Your tax rates remain steady for 2024–25, but keep an eye out for the upcoming cuts in 2026 and 2027. Remember to claim all eligible deductions and offsets to maximise your refund.
  • For small business owners
    Take advantage of the extended instant asset write-off to reduce your taxable income this year. Also, be prepared for increased ATO scrutiny.
  • For property investors
    If you’re a foreign resident, be aware of the new withholding rules to avoid surprises.
  • For everyone
    Maintain good records, lodge on time and consider consulting our tax professionals to navigate these changes smoothly.

Tax changes can be a bit like the weather in Australia – sometimes sunny, sometimes stormy – but always worth checking before you head out. Stay informed, stay compliantand make the most of the opportunities these new rules offer.