No. Distilling alcohol is not illegal in Australia. It is licensed, which is a different thing, and the distinction is where almost everyone gets lost.
Owning a still 5L or less is legal. Owning a boiler and a condenser is legal. Distilling water, essential oils and botanical extracts is legal. Brewing beer, cider and wine at home is legal. Distilling spirits requires an excise manufacturer licence from the ATO, which is free to apply for.
The short answers
- A still of 5 litres or less needs nothing at all, provided you are not distilling alcohol with it. Buy it and use it.
- Permission for a still is separate from any alcohol licence, and you need it for anything over 5 litres unless you already hold a manufacturer licence. It is free.
- Distilling water, essential oils, hydrosols and botanical extracts needs no licence at all.
- Brewing beer, cider and wine at home is completely legal and needs no licence, with no volume cap for personal use.
- Distilling alcohol requires an excise manufacturer licence. It is free to apply for through the ATO.
Two permissions, and most people confuse them
These are separate approvals covering separate things, and mixing them up is the single most common error in home distilling discussions.
| Permission for a still | Excise manufacturer licence | |
|---|---|---|
| Covers | Owning or possessing the equipment | The act of distilling alcohol |
| When you need it | Still over 5 litres | Distilling alcohol to drink in a still of any size |
| Depends on what you distil? | No. Required regardless of use | Yes. Only for alcohol |
| Cost | Free | Free |
| Apply | Still, application for permission | Licence to manufacture alcohol |
If you already hold a manufacturer licence, you do not need to apply separately for still permission. The still permission exists for people who own equipment without a licence to distil, which includes anyone using a larger still for water or essential oils.
Permission for the still is not itself a licence to distil alcohol. They are two separate applications.
What you can legally do with a still right now
Plenty, and this is where most of our customers sit.
- Distil water. No licence, no permission on a unit of 5 litres or less.
- Essential oils and hydrosols. The essential oil distillation range exists for exactly this.
- Herbal tinctures and botanical extracts.
- Brew beer, cider or wine at home. Fully legal, no licence, no volume cap for personal consumption.
- Flavour a bought bottle with an essence. Adding flavour to purchased spirit is not distilling and does not touch any of this. Our full essence range covers spirits and liqueurs.
The Air Still and Air Still Pro are both 4 litres, under the threshold, and need no permission to buy, own or use.
Larger gear works differently. A T500 boiler and condenser are sold as separate items and are not a still until you join them, so no permission is needed to buy the parts. Assembling them into a working still over 5 litres is the point at which you apply for ATO still permission, regardless of what you intend to distil.
What the excise actually costs, at 2026 rates
This is the part that explains everything else. Excise duty on spirits is charged per litre of pure alcohol, abbreviated LAL, and it is indexed to CPI twice a year in February and August.
From 3 August 2026 the rate is $110.15 per litre of alcohol, up from $107.99. The current figure is always on the ATO's excise duty rates for alcohol page.
What that means for one bottle:
| Calculation | |
|---|---|
| Standard bottle | 700 ml at 40% ABV |
| Pure alcohol content | 0.28 LAL |
| Excise duty | 0.28 x $110.15 = $30.84 |
Now take a $40 bottle of vodka off a bottle shop shelf:
| Component | Amount |
|---|---|
| Excise duty | $30.84 |
| GST | $3.64 |
| Total tax | $34.48 |
| Left for distiller, distributor and retailer | $5.52 |
About 86% of that $40 is tax. The spirit itself, the bottle, the freight, the wholesaler's margin and the retailer's margin share what is left. That reframes the whole conversation: the excise is not a penalty aimed at home distillers, it is the same duty already baked into every bottle you have ever bought.
How the law ended up like this
Short version, because the history explains the shape of the rules.
- The Excise Act 1901 is one of the first pieces of Commonwealth legislation, passed the year of Federation, and it treats distillation as a revenue matter from the outset.
- Home brewing of beer was liberalised in the early 1970s under the Whitlam government, which is why beer and wine sit outside the licensing regime today.
- Distillation was never included in that liberalisation. The carve-out covers fermentation, not distillation.
- Indexation of alcohol excise to CPI was introduced in 1983, which is why the rate climbs twice a year without any new legislation.
Where that leaves you
- If your still is 5 litres or under and you are not distilling alcohol, you need nothing. Buy it and use it.
- If your still is over 5 litres, apply for still permission. It is free.
- If you want to distil alcohol, you need an excise manufacturer licence. It is free to apply for and the ATO's client services line is genuinely helpful.
- Check the current excise rate yourself, because it moves every February and August.
Have a look at the full range of stills and starter kits, or read our complete guide to home distilling in Australia for the practical side. Questions about your own situation are best directed to the ATO, but if it is about equipment, ask away.
This article is general information, not legal or tax advice.
FAQ
Q: Is it illegal to distil alcohol in Australia?
Owning and using a still in Australia is legal. Distilling alcohol specifically to drink requires an excise manufacturer licence from the ATO, which is free to apply for, and details are on the ATO website. Distilling water, essential oils and botanical extracts requires no licence, and brewing beer, cider and wine at home needs no licence at all.
Q: Do I need permission to own a still in Australia?
Only if it is over 5 litres. A still of 5 litres or less needs no licence or permission provided you are not distilling alcohol to drink with it, which is why 4 litre benchtop units are sold freely. Above 5 litres you apply to the ATO for still permission, which is free, regardless of what you intend to distil. If you already hold a manufacturer licence, separate still permission is not required.
Q: How much is excise duty on spirits in 2026?
$110.15 per litre of pure alcohol from 3 August 2026, up from $107.99. On a 700 ml bottle at 40% ABV that is $30.84 in excise before GST. The rate is indexed to CPI every February and August, so check the ATO's current rates page for the latest figure.
Q: Is the excise licence expensive?
No. There is no charge to apply for an excise manufacturer licence. Applications go through the ATO and the criteria are on their website.
Q: Can I distil water or essential oils without a licence?
Yes. The licence applies to distilling alcohol. Distilling water, making hydrosols, essential oils or botanical extracts needs no excise licence. If the still is over 5 litres you still need permission for the equipment itself, but that is separate from the alcohol licensing question.
