2017 Federal Budget - How does it affect you?
On Tuesday the 9th of May the treasurer Scott Morrison delivered the much anticipated 2017 Federal Budget. The big ticket items predominately related to housing prices, spending on infrastructure and education, family violence spending and reforms to the welfare system.
Here are some key points from Tuesday night and how they will affect taxpayers:
1) Medicare Levy
From 1 July 2019 the medicare levy will be increased from 2.0% to 2.5%. This will affect single tax payers earning over $21,655 and families earning over $36,541, who will be required to pay an extra 0.5% of tax which will go towards funding the National Disability insurance scheme
2) Housing Prices & Negative Gearing
From 1 July 2017 travel expenses incurred in relation to inspecting, maintaining or collecting rent from a residential property will no longer be tax deductible. This means that any flights, hire car and accommodation expenses to inspect properties (for example in another state) will no longer be allowed
From 9 May 2017 new restrictions are proposed to be put in place limiting the amount of depreciation that can be claimed on plant and equipment on rental properties. Only plant and equipment that the current property owner has purchased will be eligible for depreciation deductions. Anything purchased by the previous owner will form part of the cost base. This will have no effect on properties bought before this date. Those properties can continue to claim depreciation on plant and equipment purchased with the property
From 1 July 2017 the government is allowing first home-buyers to either salary sacrifice or make after tax contributions to their super fund in order to help with a deposit for their first home of up to $30,000. The most any one tax payer can contribute under this proposal is $15,000 per year
From 1 July 2018 a taxpayer 65 years old or over will be able to make a non – concessional contribution of up to $300,000 from the proceeds received when selling their home which they have owned for a minimum of ten years. It is important to note that if you receive a government pension this contribution will be counted under the assets test
3) Small Business Concessions
The $20,000 instant asset write off has been extended for another year, with an end date of 30 June 2018. This allows small business to instantly write off any assets they purchase under $20,000
4) HELP Debt Repayment
The HELP debt repayment threshold. Currently the threshold is $55,874 however from 1 July 2018 it will be decreased to $42,000 with eligible people having to make repayments of 1% of their taxable income. It will then increase as their taxable income increases
If you have any questions about the federal budget and how it may affect you and your business, please contact our office on 03 8534 5500 for further details.