Personal Income Tax Measures

1. Limit on Depreciation of Rental Properties

From 1 July 2017, plant and equipment included in a property purchased after 09/05/2017 will not be depreciable.  Investors purchasing such items after this date can depreciate those items over their effective life.

2. No Deduction for travel to inspect residential properties

From 1 July 2017, an investor can claim the cost of meeting with property managers, but not for those costs if self-managing.

3. Medicare Levy

From 1 July 2019, the Medicare Levy will increase to 2.5%.

4. Higher Education Debt (prev. HECS)

From 1 July 2018, the minimum threshold for repayment is 1% at $42,000, up to 10% repayment at $119,882.

Small Business

1. $20,000 Immediate Write-Off

To be extended to 30 June 2018 for all businesses with turnover up to $10m.

2. CGT Concessions

From 1 July 2017, concessions can only be accessed for assets used in a small business (less than $2m turnover, or business assets less than $6m).

Superannuation

1. First home superannuation saver scheme

From 1 July 2017, First home buyers can make voluntary contributions up to $15,000 and up to $30,000 in total into an approved super fund.  Can be withdrawn after 1 July 2018 for a first home deposit and will be taxed at the taxpayer's marginal rate less a 30% offset.

2. From 1 July 2017, the amount of borrowings (LRBA's) in an SMSF will be included in a member's total balance in the fund, to prevent a member exceeding the contribution caps.

3. Over 65's can sell their home if held for more than 10 years and put $300,000 (each) into superannuation.  ( Note : at this time that would be included in the assets test, so no advantage for now).

GST

1. GST on new home construction

From 1 July 2018, purchasers of newly constructed residential properties must pay the GST directly to the ATO.

Foreign Investors

1. Main residence exemption

From 9 May 2017, foreign and temporary tax residents will not be eligible to use the CGT main residence exemption.

2. Charge on underutilised residential property

Foreign owners of residential property who neither rent or live in the property for at least six months a year will be required to pay a charge of $5,000.

3. Restricting foreign ownership in new developments

There will be a 50% limit on foreign ownership of new developments.

4 . Foreign resident CGT Withholding

From 1 July 2017, purchasers from foreign residents must withhold 12.5% of the contract price where the contract exceeds $750,000 (prev. $2m).

Affordable Housing

1. Increased CGT discount for resident individuals investing in affordable housing

Qualifying housing is that let to low to moderate income tenants at a discount to the private rental market.  The property must be held for at least three years, and the discount increases from 50% to 60%.

ATO Funding

1. Taxable payments reporting extended from 1 July 2018 to couriers and cleaners.

2. ATO audits to be increased to better target the black economy, small business, and non-lodgers.