2017 Budget Updates: For Individuals

The Federal Treasurer, Scott Morrison has delivered his second budget. Mr Morrison said the budget is focused on boosting the economy and households, so that we live within our means and are able to return the budget to balance in 2020/21.

Below we highlight the individual tax areas that the Budget has targeted that will impact our clients.

Individuals

  • The Medicare levy will be increased from 2.0% to 2.5% of taxable income from 1 July 2019. Other tax rates that are linked to the top personal tax rate, such as the fringe benefits tax rate, will also be increased. All revenue generated by the Medicare levy will be used to support the National Disability Insurance Scheme (NDIS) and to guarantee Medicare.
  • The Medicare levy low-income thresholds for singles, families, and seniors and pensioners will increase from the 2016/17 income year.
  • A new set of repayment thresholds and rates under the higher education loan program (HELP) will be introduced from 1 July 2018.

Rental Properties

  • Investors who purchase plant and equipment for their residential investment property after 9 May 2017 will be able to claim a deduction over the effective life of the asset. However, subsequent owners of a property will be unable to claim deductions for plant and equipment purchased by a previous owner of that property.
  • Deductions for travel expenses related to inspecting, maintaining or collecting rent for a residential rental property will be disallowed from 1 July 2017.

CGT discount increased for affordable housing investments

The CGT discount will be increased from 50% to 60% for Australian resident individuals investing in qualifying affordable housing.

The conditions to access the 60% discount are:

  • the housing must be provided to low to moderate income tenants
  • rent must be charged at a discount below the private rental market rate
  • the affordable housing must be managed through a registered community housing provider, and
  • the investment must be held for a minimum period of three years.

This measure will apply from 1 January 2018.

 

Here are the budget updates for Small Businesses and GST and Superannuation

If you have any enquiries regarding this, please do not hesitate to contact us.


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