Australian Federal Budget 2025–26: Impact on Aussie Expats and Non-Residents
The Australian Federal Budget 2025–26 may not have been crafted for Australian expats, but it definitely affects them and non-residents. With an election looming, the Albanese Government’s fourth budget is packed with domestic cost-of-living relief, housing reforms, and tax adjustments. While most measures target residents, there are a few key changes that expats and non-residents living overseas need to keep an eye on.
Here’s what matters most if you’re an Aussie living abroad or a non-resident with Australian interests.
1. Foreign Buyers Locked Out of Existing Homes
A major headline for non-residents is the two-year ban on foreign buyers purchasing existing residential properties in Australia, effective from next month.
This is for:
- Temporary residents
- Foreign nationals living overseas
The ban excludes new builds and developments that genuinely boost housing supply. But if you were eyeing an existing house or investment property Down Under, you’ll need to press pause until at least mid-2027.
It’s a politically motivated move to ease pressure on housing availability before the federal election, and it matches a Coalition election promise.
- Cost to Government: $90 million in lost application fees over five years.
- Enforcement funding: $5.7 million to police the ban and $8.9 million for a land-banking audit.
2. No New Tax Breaks for Expats
Unlike Australian residents, expats won’t benefit from the new income tax cuts rolling out from July 2026. The cuts reduce the marginal rate on income between $18,201 and $45,000 to 15% (and then to 14% a year later), but these apply only to resident taxpayers.
If you’re classified as a non-resident for tax purposes (which most expats are), your tax rates remain unchanged, starting from 30% from the first dollar earned in Australia.
So, if you:
- Own Australian rental property,
- Receive dividends from Aussie shares,
- Or have other assessable income back home,
…there’s no budget bonus here.
3. Student Debt Relief Tied to Residency (and Politics)
The budget includes a 20% cut to student HELP debts, but this is:
- Subject to legislation, and
- Contingent on Labor winning the next election.
If passed, the average write-down is $5,520. But it’s not yet clear if this would apply to Australians living overseas — and expats with HELP debts will want to read the fine print on eligibility, especially around residency requirements.
4. Tobacco Crackdown & Duty-Free Allowances
The budget acknowledges a massive hit to tobacco tax revenue due to illicit imports. For travellers — including returning Aussies — this could mean tighter enforcement at borders.
No new limits were announced on duty-free tobacco allowances, but don’t be surprised if future crackdowns hit airports and postal imports.
5. No Change to Superannuation for Expats
There were no new measures in this budget targeting superannuation or overseas contributors. If you’re contributing to a super fund from abroad or planning on returning home and accessing your retirement savings, it’s business as usual — for now.
With the election on the horizon, more changes could follow — particularly around tax residency rules, overseas income reporting, and super access. Australian expats should stay across policy shifts and be ready to adjust financial plans accordingly.
Stay Ahead of the Curve with Aussie Expat Specialists
- Looking to buy property in Australia from overseas — or wondering how these budget changes affect your investment plans?
- We specialise in helping Aussie expats and foreign nationals navigate Australian property finance. Whether you’re concerned about the foreign buyer restrictions, tax implications, or just need guidance on securing a mortgage from abroad, our team is here to make it simple.
- Get in touch with Odin Mortgage today and speak with a broker who understands your expat situation — and speaks your language.
- Contact Your Australian Expat Mortgage Specialist!
Key Takeaways
- Foreign Ownership Ban: Foreigners can’t buy existing homes in Australia for 2 years. ⬆️
- Income Tax Cuts: Not eligible as non-residents. ⬆️
- HELP Debt Write-Down: Possible benefit, but pending legislation and residency status. ⬆️
- Superannuation: No change. ⬆️
- Tobacco Enforcement: Stricter border scrutiny likely. ⬆️
FAQs about the Australian Budget 2025-26 Impact on Aussie Expats
Do the tax cuts in the 2025–26 Australian Budget apply to Aussie expats?
No, the personal income tax cuts introduced from 1 July 2026 do not apply to non-residents. Expats will continue to be taxed at the standard non-resident rates of 30% for income up to $135,000, and higher for greater earnings.
Will the foreign buyer ban in the 2025–26 Budget affect Australian expats?
Yes, Australian expats are subject to the two-year ban on buying existing residential properties in Australia, effective from 1 April 2025. However, this ban does not apply to new builds or certain investment properties.
How will the 2025–26 Budget affect capital gains tax (CGT) for Aussie expats?
The 2025–26 Budget proposes tougher CGT rules for foreign residents, including broader asset coverage, a longer testing period, and mandatory ATO reporting for large asset disposals over $20 million. This will impact expats who own or plan to sell significant assets in Australia.
What impact will the 2025–26 Budget have on expats' superannuation?
While there are no new superannuation measures directly affecting Aussie expats in this Budget, proposed changes to tax high super balances over $3 million (Division 296) could still affect expats, depending on the election results.
Are there any other major changes in the 2025–26 Budget that affect Aussie expats?
Yes, the Budget increases funding for ATO tax compliance programs, meaning expats and non-residents with complex Australian tax affairs may face greater scrutiny and enforcement in the future.
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