The following changes will affect individuals and families, the main one being the change in the Medicare Levy.
From 1 July 2019, the Government will increase the Medicare levy from 2% to 2.5% of taxable income.
The minimum threshold for HELP repayments will be reduced to $42,000 as of 1 July 2018. For comparison, the minimum threshold for 2017/18 is $55,874
The 2% Budget Deficit Levy on incomes over $180,000 has not been extended. The levy will therefore cease at the end of the 2016-17 financial year.
The Government is taking steps to improve housing affordability. This involves working with State and Territory governments in facilitating planning and increasing the supply of residential land.
An annual charge on vacant residential property owned by foreign owners has been proposed. Foreign owners whose properties are not occupied or genuinely available on the rental market for at least six months per year will be affected by this charge.
Furthermore foreign and temporary tax residents are now denied access to the Capital Gains Tax (CGT) main residence exception. This will not apply to existing holdings until 30 June 2019.
An increased CGT discount for investments in affordable housing has been proposed. From 1 January 2018 the CGT discount for individuals will be increased from 50% to 60% for gains relating to investments in qualifying affordable housing.
Travel expenses related to inspecting, maintaining or collecting rent for a residential property will no longer be tax deductible from 1 July 2017.
Tax deductions for plant and equipment on already established residential real estate purchased from 10 May 2017 will now be limited to outlays actually paid by investors. However, plant and equipment on new, or off-the-plan housing and apartments remains available. Furthermore plant and equipment on already established residential real estate purchased prior to 10 May 2017 can still be claimed.
Follow the links to read about the sections that are relevant to you and if you have any queries about the impact of these announcements then please don’t hesitate to contact us.