2017 Federal Budget Snapshot

2017 Federal Budget Snapshot

On Tuesday the 9th May, the Federal Government handed down its Budget for the 2017-18 financial year. According to Federal Treasurer Scott Morrison, this year’s Budget is founded on the principles of fairness, security and opportunity. Mr Morrison claims that the government’s proposed measures will raise almost $21 billion in revenue over the next four years, returning Australia’s budget to surplus by 2021.
Here is a summary of the key Budget announcements. Note that each of these proposals will only become law if it is passed by Parliament.

Small Business:

  • $20,000 instant asset write off for small business to remain until 30 June 2018.
  • Small business turnover threshold to increase to $10M.

Individuals:

  • Medicare Levy to increase from 2% to 2.5% from 1 July 2019.
  • Medicare Levy low income thresholds from 1 July 2016 will be:
    • Singles – $21,655
    • Families – $36,541
    • Single Seniors & Pensioners – $34,244
    • Family senior and pensioners – $47,670
  • HELP debt repayment thresholds to be adjusted. New minimum threshold drops to $42K.

Rental Property Investors:

  • For investors – from 1 January 2018 fi individuals invest in qualifying affordable housing will be able to receive a 60% CGT discount instead of 50%.
  • From 1 July 2017 you can no longer claim travel deductions to visit rental properties.
  • Depreciation deductions for residential plant and equipment (e.g. dishwashers and ceiling fans) will be limited to investors who actually incur the outlay – not subsequent owners.

Superannuation:

  • Individuals will be able to make voluntary contributions to superannuation of up to $15,000 per year and $30,000 in total, to be withdrawn for the purpose of purchasing a first home. Both voluntary concessional and non-concessional contributions will qualify.
  • The outstanding balance of a limited recourse borrowing arrangement (LRBA) will be included in a person’s annual total superannuation balance.
  • It is proposed that from 1 July 2018, people aged 65 and over will be able to make a non-concessional contribution of up to $300,000 from the proceeds of selling their home. These contributions will be in addition to the existing contribution caps.

For further information relating to any of the above and other budget changes you can refer to: www.budget.gov.au