“You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time.”
The 2017 Federal Budget delivers a series of measures to attempt to please as many people as possible. It tackles the issues currently in focus across the Australian community – gaps in healthcare, first home ownership, foreign workers, investment and bank accountability to name a few of the pressure points. It also delivers an economic ‘sugar hit’ in the form of $75 billion in infrastructure projects.
From 1 July 2017 the Federal Government will no longer be allowing deductions for travel expenses that may relate to you inspecting, maintaining or collection of rent for a residential rental property.
This does not stop investors from engaging a third party such as a real estate agent for property management service, as this expense will still be deductable.
If you are a foreigner who owns investment properties in Australia you will be slugged with an extra charge for properties that are left vacant - and there will also be an increase in application fees.
Also property investors who purchase plant and equipment (chattels) for a residential investment property from today will only be able to claim a deduction over the life of the asset if they purchased the chattel directly. Subsequent owners of the property will not be able to claim depreciation on plant and equipment purchased by the previous owner.
The budget also means that most taxpayers will be paying more tax with an increase of 0.5% on the Medicare Levy to help fund the NDIS. This will kick in on 1 July 2019.
It's fair to say that the big banks won't be happy with the 5 biggest banks slugged with a 0.06% levy that will start on 1 July.
Also being taxed more in this budget is people who smoke roll-your-own tobacco or cigars, with a tax increase on these products bringing them into line with the tax rates on cigarettes..
First Home Buyers
There is a small win for first home buyers, with the budget giving them the ability to use voluntary contributions to their superannuation to save for a house deposit. Withdrawals will be taxed at a lower rate, but the amount you can contribute is capped at $15,000 a year and $30,000 all up.
If you would like to read a full summary of the 2017 Federal Budget download it here.
If you have any concerns or questions please don't hesitate to contact us
2017 Federal Budget Summary with thanks to The Knowledge Shop