A brief comment about proposals of the 2017 Federal Government Budget.
The focus is on Home owners and investors in property.
First Home Buyers
First Home Buyers will be able to salary sacrifice $15,000 per year from July 1st 2017 up to a maximum of $30,000, to deposit into their Super Fund as savings toward a deposit for their first home. These pre-tax deposits, as well as deemed earnings on the deposits will be taxed at 15%.
Withdrawals can be made from 1st July 2018 and will be taxed at marginal tax rates, less a 30% offset. The overall benefit could be as high as a 30% increase in savings.
First Home Buyers still need a plan to save outside this arrangement and I am more than happy to help point you in the right direction.
Negative Gearing
From 1 July 2017 deductions for plant and equipment items such as washing machines etc. will only be allowed if the investor purchased them independently from the property purchase. Existing investments will be treated under the existing rules.
From 1st July 2017 investors will not be able to claim tax deductions for travel expenses “related to inspecting, maintaining or collecting rent for a residential rental property”.
Negative Gearing implies you are planning to lose money on your investment. Check with Sandra before buying a negatively geared property whatever your income.
Empty Houses
From 7.30pm on budget night 2017, foreign owners will be charged an annual vacancy charge for properties not occupied for six months each year.
Retirees
From 1st July 2018 people aged 65 and older will be able to make a non-taxed contribution of up to $300,000 to their Superannuation after selling their home.
There are other options for the retiree to obtain cash out of their home equity without selling. This cash can be used for expenses, health costs, travel and lifestyle, with no repayments made until last owner passes or moves into full time care. Please call me on 9653 2034 if you want information or help with this option.
Affordable Housing
The Capital Gains Tax discount will increase from 50 per cent to 60 per cent for qualifying affordable housing with rent charged below the private rental market rate, and managed through a registered community housing provider. The investment must be held for a minimum period of three years.
Bank Tax
By now we have all heard about the tax on the 5 largest banks and we all know ultimately either the shareholders including Superannuation Funds, and Mortgage holders are the ones who will ultimately pay this tax in reduced dividends or increased fees and interest charges.
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