The capital of Australia is Canberra, which is in the Australian Capital Territory (ACT). Canberra became the capital of Australia in 1927 and is located in the the Australian Capital Territory (ACT).A project to find a national capital was commenced in the 1890s prior to Federation.elbourne was never the capital of Australia. There is a common misconception that, because Melbourne was the temporary seat of government between Federation (1901) and 1927, … that it was also the capital. This was not the case, as it was never officially designated the title of Capital, even temporarily.