Stamp duty would be halved for sales of commercial properties worth less than $1.5 million for a $1.5 million property and abolished completely from next year. For a $1.5 million property that means a cut from about $76,000 to about $37,000 this year.

Mr Barr, speaking to The Canberra Times ahead of his sixth budget as treasurer and his third as chief minister, said stamp duty would also be reduced more "at the affordable end of the market".

He did not give details, but if stamp duty cuts foreshadowed last year are followed through, stamp duty on a $500,000 house will be cut by $660 to $12,800. For a house worth $700,000, stamp duty will be cut by $1100 to $22,360. And for a $1 million house, it will be cut by $1710, to $42,210.

On top of the 7 per cent rates rise, an average $150 extra increase in rates for owners of units will also hit Canberra's 1500 dual occupancies. And owners of units that are rented out will face an average $480 increase in land tax.

The water abstraction charge will rise 3 per cent a year from July, raising an extra $370,000 in the first year, a change foreshadowed in January. The utilities levy will continue increasing by 5 per cent a year.

Mr Barr confirmed this week the government would honour its election commitment to halve the registration costs for caravans to $640 a year.

And he said the budget would include "the usual range of prudent revenue measures consistent with what we have said previously".

When Mr Barr delivered the 2016-17 budget last June, he predicted a $182 million deficit. By the time of the mid-year budget update in January, the situation and improved markedly, to a forecast deficit of $119 million. The most recent March quarter financial report suggests the figures might be improving still further, which would give Mr Barr some happy news to deliver on Tuesday.

He said this week that the return to surplus would still occur in 2018-19, news that will surprise some. The government has continued to push back its surplus year by year, and while it has promised a 2018-19 surplus for two years now, the figure has narrowed to the point where it almost ceases to exist. At last year's budget the surplus forecast was cut from $50 million to $33 million, then at the pre-election update it was pared back to $16 million. At the mid-year update in January, it was cut to just $5 million.

Mr Barr said the budget position "is obviously improving considerably and we expect that trajectory to continue". He pointed also to improvements in the wider economy, with strong economic growth and service exports and low unemployment.

The commonwealth budget had also removed the fear of public service job cuts and funding cuts, leaving only the federal decentralisation agenda as a risk to the local economy.

"Those areas that have been a risk for us previously seem reasonably well settled for now," Mr Barr said.

".... It would seem that they have ruled out policy agencies from being decentralised, so I think on balance that means that the vast majority of commonwealth public servants who are currently located in Canberra will continue to be ...

"So our budget will very much focused on delivering the election commitments we made, and sticking to the budget plan that we outlined in terms of a return to a balanced budget in 2018-19."

The budget will include funding to prepare the second stage of light rail to Woden, with $25 million earmarked for planning and feasibility work. It will include some of the $38 million for a boardwalk and reclamation of lake front at West Basin, and money for six extra police to patrol nightspots.

The government is promoting health as a key focus, with money for new nurses, $600,000 for planning the expanded maternity hospital, $13.5 million for a new nurse-led walk-in medical centre in Gungahlin, and perhaps a start to planing work on the new "Spire" building and emergency department at the Canberra Hospital.

Mr Barr said a "quantum of funding" would be announced for the City Renewal Authority, which is to control the sale of land and redevelopment in Northbourne Avenue, the city and West Basin. While the finding would be revealed, the details of "further projects" by the City Renewal Authority to begin in the coming year would not be announced at the budget but during the year.

The ACT would maintain its programmed land release, and with the federal government moving to sell the CSIRO land off the Barton Highway near Gungahlin for 15,000 homes in the coming years, more land would come on to the market. The ACT's land release would focus on Denman Prospect, which has been sold as a block to the Snow family to develop, the direct release of suburbs in north Gungahlin, the joint venture with the Corkhill family to develop Ginninderry in West Belconnen and the former Fluffy blocks. Mr Barr said that range of projects would mean more competition and more variance in land supply, improving affordability.