Victoria 2026-27 State Budget

The Allan Government’s 2026-27 Budget, delivered on 5 May 2026, focused largely on cost-of-living relief, but stops short of any further tax reforms.

As part of her budget speech on 5 May 2026, Jaclyn Symes announced the Government’s operating surplus of $1 billion in 2026-27 but, while promising to ease the cost of living by investing in childcare, healthcare and regional Victoria, the Treasurer stopped short of committing to any further Victorian tax reforms at this stage. 

Delivering her second budget as Treasurer, and in the lead up to a pivotal election season, Jaclyn Symes took a conservative approach when handing down the state’s 2026-27 budget. The Victorian Government was in no position to introduce any new taxes, however owing to Victoria’s net debt position tipped to grow to $199 billion in 2029-30, there was similarly a limited scope to cut any of the existing taxes in a meaningful way.

Cost of living measures

On top of continuing to provide the First Home Owner’s Grant of $10,000 for eligible first home buyers, the Victorian Government announced that it will further extend the existing stamp duty concession for all off-the-plan apartments, units and townhouses until 21 April 2027.  This follows an initial extension which originally extended the concession until October 2026. 

Other changes include a 20% rebate on registration costs for light vehicles, as well as a commitment to halve the price of public transport until 1 January 2027.  While limited in scope, the 2026-27 budget aims to emphasise these short term measures, but falls short of providing meaningful relief.

Healthcare and frontline services

Building on prior budgets, the 2026-27 Victorian budget invests approximately $3.9 billion in healthcare alone, including $1.6 billion to strengthen existing healthcare services by funding more staff (doctors and nurses) and expanding hospital capacity to meet rising demand, while also allocating $284 million to open and operate hospitals and expand emergency departments, improving access to free public healthcare locally.

Infrastructure 

The state maintains its large infrastructure pipeline, with many projects scheduled to continue for the foreseeable future, however spending on these projects remains moderated.  Emphasis was placed on an investment of $1.3 billion to improve public transport, including new trains, trams and upgrades to reginal rail networks, while targeted repairs and upgrades to regional roads accounts for $73 million of the spending.

Taxation measures 

Stamp Duty – Off the Plan Concession 

As stated above, the Victorian Government will further extend the existing stamp duty concession for all off-the-plan apartments, units and townhouses until 21 April 2027. The off-the-plan stamp duty concession allows buyers to reduce the “dutiable value” of the property by deducting the construction costs on the property’s contract price.  This concession is no longer limited to first home buyers, and there is also no cap to the value of apartments which may utilise this concession.  

While a slight extension to stamp duty concessions will assist buyers to enter the market, there has been no significant reform to address the state’s growing debt, leaving families, investors and business owners uncertain.

Other tax measures

In addition to the revenue initiatives above, from 1 July 2026, non-government schools with an income per student up to $16,397 will now be exempt from payroll tax. This has been indexed from previous years and will align the threshold with the Schooling Resource Standard (SRS) (published by the Federal Government) moving forward.

However, from 1 July 2027 the Government will discontinue the motor vehicle duty concession for green passenger vehicles above the luxury car threshold. These vehicles will now be charged motor vehicle duty at the same rates as other passenger cars.

Conclusion 

Given the current state of the Victorian economy and ongoing fiscal pressures, it is perhaps unsurprising that the 2026-27 Victorian Budget delivered any material reform to the state tax landscape.  We do however hope for more significant tax reforms in future budgets to encourage growth and investments in Victoria, while reducing the costs of doing business in Victoria and providing greater certainty to investors.

To fund the various expenditures, the Government continues to rely heavily on property-related taxes, reinforcing the significance of these measures for businesses and investors alike. Key contributors include:

• Land transfer duties
• Landholder duties
• Land taxes (including absentee owner surcharge)
• Vacant Residential Land Tax
• Windfall Gains Tax
• Levies such as congestion levy and emergency services and volunteers fund 

This continued reliance on property taxes reinforces the importance of proactive tax planning.  With limited relief expected and no major reforms introduced, these taxes will continue to have a significant impact on property owners, developers and investors in Victoria.

With this in mind, seeking tailored state tax advice is more important than ever. Our State Taxes team can help you navigate these settings, identify planning opportunities, and avoid any unnecessary exposure.