The most recent budget handed down by the Australian Government in May 2024, has been widely touted as the budget ‘for all Australians’. At the heart of it are the Stage 3 tax cuts, which come into effect from 1 July 2024.

The Albanese government has reshaped the distribution of the original Stage 3 tax cuts adopted by Parliament in 2019, scaling back cuts to those in higher brackets to ‘deliver an extra $84 billion to low and middle-income earners over the next ten years and double the tax cuts for Australians on an average income'. 1

Stage 3 tax cut changes:

  • Reduced tax rates: 
    • Individuals earning between $18,201 and $45,000 per year will have their tax rate reduced from 19% to 16%
    • Individuals earning between $45,001 and $120,000 per year will have their tax rate reduced from 32.5% to 30%
  • Simplified tax system: The number of tax brackets will be reduced from five to four, making the tax system simpler and easier to understand.
  • Increased Low and Middle Income Tax Offset (LMITO): The LMITO will increase from $1,080 to $1,500, providing additional tax release to low and middle-income earners.

Learn more about the tax cuts and what it means for you on the Treasury website or estimate your tax cut using the Tax cuts calculator.

For most Australians the extra money back in pockets will provide much needed respite from cost-of-living pressures, but for others, this may present a great opportunity to invest, save for a home or for retirement.

CommBank is with you at each step of your home buying journey whether you’re in the saving phase or actively searching for your next property:

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Things you should know

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. As this information has been prepared without considering your objectives, financial situation or needs. You should, before acting on this, consider the appropriateness to your circumstances. 

Reference and source: Stage 3 Tax Changes: A Win for Australians & Sensible Policy - The Australia Institute