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Australia
A 30% uncapped Location Offset, a stackable 30% PDV Offset, state incentives on top, and world-class crews and stages from Sydney to the Gold Coast.
Australia Film Incentive Overview
- 30% Location Offset
- 30% PDV Offset
- Stacks with state schemes
- 4 min. filming days
The Australia film incentive framework is built from three federal offsets, and knowing which one applies is the first decision any producer makes about the territory. The Location Offset provides a 30% rebate on qualifying Australian production expenditure for large-budget film and television projects shot in Australia. The PDV Offset provides 30% on qualifying expenditure relating to post, digital and visual effects work, regardless of where the project was shot. The Producer Offset provides 40% for Australian feature films with a theatrical release and 30% for other eligible formats, and is aimed at domestic productions passing a cultural test.
The single most important recent development is the increase to the Location Offset. On 4 July 2024 the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 passed Parliament, raising the Location Offset from 16.5% to 30% for productions commencing principal photography on or after 1 July 2023. That change nearly doubled the value of the Australia film incentive for international productions overnight and merged the pandemic-era Location Incentive programme into the new offset. Any source still quoting 16.5% is describing a superseded regime.
The Location Offset and PDV Offset are administered by the federal Office for the Arts, while the Producer Offset is administered by Screen Australia. Crucially, there is no cap and no sunset clause on the Location Offset, which distinguishes the Australia film incentive from the many European and Asian schemes that operate within finite annual funds and force productions to race a calendar.
How the offsets work
Each federal offset is a refundable tax offset, paid to the applicant company as a cash rebate through the Australian tax system once a final certificate has been issued and the claim processed. The calculation is straightforward: qualifying Australian production expenditure, known throughout the industry as QAPE, multiplied by the applicable rate. A production with A$50 million of QAPE claiming the Location Offset receives A$15 million.
QAPE for the Location Offset generally covers production expenditure relating to goods and services provided in Australia, the use of land in Australia, and the use of goods in Australia at the time they are used in making the production. Importantly, QAPE for the Location Offset includes spend on both production and post-production, including animation and digital and visual effects.
The stacking rules are where producers most often go wrong, and they are worth stating precisely. The Producer Offset, Location Offset and PDV Offset are mutually exclusive in the sense that a producer may access only one federal incentive per eligible project: a project cannot claim the Producer Offset if it has received a final certificate for the Location or PDV Offset. However, the Location Offset and PDV Offset can be combined on the same production, meaning a large international production that both shoots in Australia and carries out its post and VFX work there can claim 30% on its production QAPE and 30% on its post and VFX QAPE. That combination is the most powerful configuration of the Australia film incentive and the reason so many studio productions now base entire pipelines in the country.
Federal offsets can also be combined with state and territory government incentives, which operate independently and add materially to the total. New South Wales, Victoria, Queensland, South Australia and Western Australia all run their own attraction schemes, and the effective total return on a well-structured production is meaningfully above the 30% federal headline.
Eligibility and expenditure thresholds
The Location Offset targets large-budget footloose international productions, and the thresholds reflect that. Alongside the rate increase, the qualifying Australian production expenditure thresholds were raised: from A$15 million to A$20 million for film, and from A$1 million per hour to A$1.5 million per hour for television series. Productions below those levels cannot access the Location Offset, though the PDV Offset operates on a far lower threshold of A$500,000 of PDV expenditure in Australia, which opens the Australia film incentive to a much wider range of projects for post and VFX work alone.
The 2024 reform introduced additional obligations that came with the higher rate, and these are conditions rather than aspirations:
- Productions must meet or exceed a minimum expenditure requirement on eligible training activities, or qualify for an exemption by contributing to the broader workforce and infrastructure capacity of the sector
- One or more Australian providers must deliver post, digital and visual effects for the production
- New reporting requirements apply to capture data on the production’s Australian activity
The training obligation in particular should be planned into the budget and schedule from the start, since retrofitting a compliant training programme late in production is difficult and the exemption route requires its own demonstrable commitments.
The Producer Offset follows a different logic entirely. It is designed to support Australian storytelling, requires the project to pass a significant Australian content test, and delivers 40% for feature films with theatrical release and 30% for other eligible formats including television series, documentaries, short films and online content. Recent changes raised the rate for non-feature formats from 20% to 30% and removed the 65-commercial-hour cap for drama productions. For international producers, the Producer Offset is generally relevant only through official co-production structures.
Application process
Both the Location and PDV Offsets run on a two-certificate process, and the Australia film incentive rewards early engagement with it.
- Read the guidelines and glossary before production begins. The department publishes detailed guidance on what does and does not constitute QAPE, and decisions made in pre-production determine what qualifies later
- Apply for a provisional certificate. Applications are made through the department’s online system, and provisional certification gives the production and its financiers a documented position on eligibility before the money is committed
- Establish the Australian applicant company and the contractual structure through which expenditure will be incurred, since the offset is claimed by the applicant company through the Australian tax system
- Produce, tracking QAPE rigorously. Expenditure records must support an audited claim, and the training and Australian PDV provider obligations must be evidenced as they are met
- Apply for a final certificate. For the PDV Offset, applications are made once the production is no longer incurring PDV-related QAPE. Applications are assessed by the Film Certification Advisory Board, with the certificate issued by the Minister for the Arts
- Claim the offset in the applicant company’s tax return; the final certificate is a precondition of the claim
For projects pursuing the Producer Offset, the equivalent process runs through Screen Australia’s Producer Offset and Co-production Unit, with provisional and final certification assessed against the significant Australian content requirements.
Locations and infrastructure
The physical product behind the Australia film incentive rests on a combination of range, capability and reliability that few territories match. The continent supplies desert and outback in the red centre, temperate and tropical rainforest, alpine country, more than thirty thousand kilometres of coastline, and in Sydney and Melbourne two cities that double convincingly for North American and European urban environments. Queensland’s Gold Coast offers subtropical coast and hinterland within minutes of major stages.
The studio base supporting the Australia film incentive is genuinely world class. Fox Studios Australia in Sydney, Docklands Studios Melbourne, Village Roadshow Studios on the Gold Coast, and expanding capacity in South and Western Australia give the Australia film incentive real infrastructure behind it, including water tanks, large-format stages and adjacent workshop and construction capacity. The post, digital and visual effects sector is among the strongest anywhere, with Australian houses delivering on the largest franchises in the world, which is precisely why the PDV Offset exists as a standalone incentive.
Crews in Australia supporting the Australia film incentive are highly experienced, English-speaking and accustomed to servicing studio productions to international standards. The practical considerations are geography and time zone: Australia is a long flight from North America and Europe, and the time difference complicates real-time collaboration with US-based executives, though the post sector has long since built workflows around it. Australia accepts the ATA Carnet, which keeps equipment movement predictable, and immigration rules apply to imported cast and crew, requiring visa arrangements through the local production entity.
State and territory incentives
The federal offsets are only part of the picture, and any serious model of the Australia film incentive has to include the state layer, which stacks on top of the federal rate and frequently determines where within the country a production lands.
Each state and territory supplements the Australia film incentive with its own attraction programme through its screen agency, and the schemes differ in structure as well as generosity. Some operate as production attraction funds negotiated case by case against the economic benefit a production brings, others as published rebates on qualifying local spend, and several offer additional support for regional shooting outside the capital cities. Screen NSW, VicScreen, Screen Queensland, the South Australian Film Corporation and Screenwest all maintain distinct programmes, and the competition between them is real: states actively bid for productions, which gives a well-advised producer genuine negotiating leverage.
The practical implication is that the choice of state is a financial decision as much as a creative one. A production whose locations could plausibly be found in more than one state should test the incentive position in each before committing, because the difference between two states can amount to several percentage points on the total budget. Because state support is often discretionary and negotiated rather than formula-driven, early engagement matters more here than with the federal offsets, and approaching a state agency after locations are locked forfeits most of the leverage.
State schemes also tend to be more accessible to mid-budget productions than the Location Offset, with thresholds set well below the federal A$20 million floor. For a production that cannot reach the federal threshold, the combination of a state incentive and the PDV Offset may still make the Australia film incentive framework worth pursuing, and it is worth modelling that configuration rather than assuming the territory is closed.
Weighing the trade-offs
The Australia film incentive is among the strongest in the world, but several realities belong in the assessment:
- The Location Offset thresholds are high. A$20 million of QAPE for film and A$1.5 million per hour for television places the offset out of reach for most independent productions, which must look to the PDV Offset or state schemes instead
- Only one federal offset per project, so the Producer Offset cannot be combined with the Location or PDV Offsets; the Location and PDV combination is the exception
- Training and Australian PDV provider obligations attach to the 30% rate and require planning, not retrofitting
- The offset is claimed through the tax system after final certification, so it must be cash-flowed through the financing period rather than received during production
- Distance and time zone add travel days, freight cost and scheduling complexity for productions based in the northern hemisphere
- Capacity is in demand. The rate increase has drawn substantial volume, and stages, crews and post houses book out well ahead
- Costs are not low. Australia is a high-wage economy, and the 30% offset offsets a comparatively expensive base rather than a cheap one
Hoodlum’s team can model a realistic net position under the Australia film incentive, including which offset applies, the achievable state layer and the QAPE definition as it affects your specific budget.
How the Australia film incentive compares
Against its principal competitors the Australia film incentive now sits firmly in the top tier. The United Kingdom offers comparable value through its audio-visual expenditure credit with deeper proximity to European finance, but Australia’s uncapped structure and absence of a sunset clause give financiers a certainty that fund-limited schemes cannot. New Zealand offers 20% with a 5% uplift and materially lower thresholds, which makes it the better fit for mid-budget work, while Australia’s higher rate and vastly greater stage and crew capacity suit the largest productions.
Canada remains the closest structural comparison, combining federal and provincial layers in much the way Australia combines federal offsets with state schemes, and the two compete directly for the same studio pipeline. Where Australia distinguishes itself is in the PDV Offset: a standalone 30% on post and VFX work regardless of where the project shot, with a A$500,000 threshold, is an unusually flexible instrument that lets a production shot anywhere in the world route its finishing work into the Australia film incentive.
The honest limitation is the entry threshold on the Location Offset. Territories offering competitive rates from a few hundred thousand dollars of spend will always capture productions that Australia’s A$20 million floor excludes, and for those projects the comparison is not close.
Budgeting around the incentive
A finance plan built on the Australia film incentive should start by confirming which offset the project can actually access, because the thresholds do the deciding. A feature with A$18 million of projected QAPE does not qualify for the Location Offset at all, and the difference between A$18 million and A$20 million of legitimately Australian spend is therefore worth 30% of the entire base, not 30% of the increment. Where a production sits near that boundary, the modelling exercise is unusually consequential.
The second discipline is understanding QAPE properly. It covers goods and services provided in Australia, the use of Australian land, and the use of goods in Australia at the time of use, and it includes post-production, animation and VFX for the Location Offset. Procurement decisions therefore drive the offset directly, and every service that can credibly be sourced in Australia converts into rebate-bearing spend.
Third, the Location and PDV combination should be tested deliberately rather than assumed. A production that shoots in Australia and finishes there can claim across both, and mapping which expenditure falls into which pool is a structuring exercise best done at budget stage with local advice.
Finally, the state layer belongs in the model from the outset. State and territory incentives stack with the federal offset and vary meaningfully in rate, availability and conditions, so the choice of state is a financial decision as much as a creative one. Hoodlum builds the offset selection, the QAPE map, the state layer and the training-obligation cost into every Australia film incentive model it prepares.
Who the Australia film incentive is right for
Large-budget studio features and premium episodic television are the clearest fit for the Australia film incentive and the productions the Location Offset was explicitly designed to attract. At A$20 million of QAPE and above, with no cap on the offset and no sunset clause, the arithmetic on a major production is compelling, and the stage and crew capacity exists to service it.
Post, digital and visual effects projects form the second and more accessible group. Because the PDV Offset applies regardless of where the project was shot and operates from a A$500,000 threshold, a production that filmed anywhere in the world can access the Australia film incentive purely by placing its finishing work with Australian providers. For VFX-heavy projects this is often the single most flexible incentive available anywhere.
Australian and official co-production projects with genuine local content should look to the Producer Offset instead, where the 40% feature rate is substantially higher than anything available to foreign productions, subject to passing the significant Australian content test.
Productions for which Australia is a weaker fit are mid-budget international features and series falling below the Location Offset thresholds, and productions whose financing cannot absorb a post-certification payment timeline. Both should model carefully and may find New Zealand or a European territory a better match.
Notable productions in Australia
The Australia film incentive sits behind a credit list that is extensive and continues to grow. The Matrix and its sequels were made in Sydney, as were the Star Wars prequels’ Australian units and a long run of studio features at Fox Studios. George Miller shot Mad Max: Fury Road’s Australian work and returned for Furiosa: A Mad Max Saga, filmed largely in New South Wales. Marvel has based multiple productions in Sydney, including Thor: Ragnarok and Thor: Love and Thunder, and Shang-Chi and the Legend of the Ten Rings shot there.
The Gold Coast has hosted Aquaman and its sequel, Pirates of the Caribbean: Dead Men Tell No Tales, and Godzilla vs Kong. Television has followed at scale, with streaming platforms producing series in Australia across genres, and the country’s post and VFX houses working on projects that never shot there at all, which is precisely the flexibility the PDV component of the Australia film incentive was designed to create.
After Australia raised its Location Offset to 30%, international productions spent a record A$1.3 billion across 22 projects in 2024/25 — a 163% increase on the previous year.
— Screen Australia
Frequently asked questions
30% of qualifying Australian production expenditure. The rate rose from 16.5% under legislation passed on 4 July 2024, applying to productions that commenced principal photography on or after 1 July 2023, so sources quoting 16.5% are out of date.
A$20 million of QAPE for film and A$1.5 million per hour for television series under the Location Offset, raised alongside the rate increase. The PDV Offset operates from a far lower threshold of A$500,000 of Australian PDV expenditure.
A producer may access only one federal incentive per project, so the Producer Offset cannot be claimed alongside the Location or PDV Offsets. However, the Location Offset and PDV Offset can be combined on the same production, and federal offsets stack with state and territory incentives.
There is no cap and no sunset clause on the Location Offset, which distinguishes it from schemes operating within finite annual funds.
Productions must meet a minimum expenditure requirement on eligible training activities or qualify for an exemption, must engage at least one Australian post, digital and visual effects provider, and must meet new reporting requirements.
No. The PDV Offset applies to qualifying post, digital and visual effects expenditure carried out in Australia regardless of where the project was filmed, which makes it accessible to productions shot anywhere in the world.
As a refundable tax offset claimed by the applicant company through the Australian tax system, following issue of a final certificate. It is not paid during production, so it must be cash-flowed through the financing period.
Talk to our incentives team about structuring your Australia shoot around the Australia film incentive.