On Tuesday night the Australian Government handed down its Federal Budget for 2017. It’s important that you take the time to understand what the Budget proposals mean – and how they might affect you personally, particularly if you are a business owner, the owner of an investment property, have a family, or are paying off HELP debt.
To help break down the key proposals, below is a Federal Budget overview that explains some of the key outcomes and what they mean to you…
- – an additional non-concessional contribution cap of $300,000 for eligible over 65 year olds who sell their home, if they have owned it for 10 years or more;
- – a first home saver scheme that allows people to use some of their super towards a home deposit – up to $15,000 per year above their employer contributions to a maximum of $30,000, taxed at 15%;
- – a 0.5% increase in the Medicare levy from 1 July 2019 to 2.5%;
- – Those earning above $180,000 annually will no longer pay the 2% deficit levy introduced in the last financial year;
- – Families earning at or above $94,316 will lose family tax benefits and payments, or have them cut altogether.
- – reinstatement of the Pensioner Concession Card for pensioners who lost their entitlement due to recent assets test changes;
- – New threshold for HELP repayments reduced to $42,000 with a miniumum 1% repayment rate. The maximum threshold is $119,882 and attracts a 10% repayment rate;
- – The small business immediate tax deduction for purchases $20,000 or below has been extended for one year, to 30 June 2018;
- – New restrictions on deductions for residential property investments – residential plant and equipment deductions will no longer be able to be transferred to new owners, and travel will no longer count as a deduction.
Headline figures include a projected 2.75 per cent growth rate for the Australian economy over the this financial year, down from 3 per cent due to the impact of Cyclone Debbie.
The government plans to raise an additional $23 billion in new taxes, largely through the increased medicare levy and a new tax on the big banks – which will affect their profits and has already resulted in their share prices dropping.
This year’s deficit of $37 billion will drop to $29.4 billion next year and the government hopes to return to surplus in 2021.
Supporting you through the changes
Depending on your circumstances, the Budget proposals could have an impact on your financial situation and your financial plans for the future. If you have any concerns, or would like to discuss your financial strategy, please don’t hesitate to call us on 07 5596 9070 to arrange an appointment.