Federal Budget 2017 Summary – How it Affects You

This year’s Federal Budget was not as controversial as previous years, however there are still changes which may affect you and your family.

Additional super contributions from proceeds of downsizing your home

From 1 July 2018, individuals aged 65 and over will be able to make an after-tax super contribution of up to $300,000 ($600,000 for couples) from the proceeds of the sale of their home, providing it was held for a minimum of 10 years. This measure will not attract any special Centrelink treatment but will allow individuals to make contributions above the super caps, without meeting work or age test requirements.

First home saver scheme

The Government will allow voluntary super contributions to be withdrawn for a first home deposit.  From 1 July 2017, individuals can make voluntary contributions of up to $15,000 per year, up to $30,000 in total to super for the purposes of this measure.

Increase in Medicare Levy

From 1 July 2019, the Medicare levy will increase by 0.5% to 2.5% of taxable income. The increase ensures the National Disability Insurance Scheme (NDIS) is fully funded.

Extending the immediate $20,000 asset write-off for small business

Accelerated depreciation rules for small businesses will extend until 30 June 2018. This allows small businesses, with aggregate annual turnover of less than $10m to immediately deduct purchases of eligible assets up until that date, provided the asset costs less than $20,000. Assets valued $20,000 or more can be depreciated at 15% in the first income year and 30% each income year thereafter.

Disallowing deduction of travel expenses for residential property

From 1 July 2017, the Government will no longer allow deductions for travel expenses related to inspecting, maintaining or collecting rent for residential rental property. However, investors can continue to deduct those types of expenses incurred by third parties such as real estate agents and property management services.

Reducing the corporate tax rate

The legislation to reduce the corporate tax rate has passed both houses but is not yet law. The reduced company tax rate will progressively apply to companies with an aggregated annual turnover of less than $50m only. The proposed rate for 2016/17 onwards is 27.5% for companies with annual aggregated turnover of less than $10m per year.  

Changes to repayment of HELP debt

The income thresholds will be revised for the repayment of HELP debt, repayment rates and the indexation of repayment thresholds. A new minimum threshold of $42,000 will be established with a 1% repayment rate and a maximum threshold of $119,882 with a 10% repayment rate.

Pensioner concession card reinstatement

Age pensioners who lost entitlement to their Pensioner Concession Card due to the assets test changes on 1 January 2017 will have their card reinstated. The card will be automatically reissued over time with an ongoing income and assets test exemption.

Family Tax Benefit (FTB)

The FTB payment rate will remain fixed until 1 July 2019 and indexed each year thereafter. From 1 July 2018, all families with total income over $94,316 will have their FTB Part A reduced by 30 cents for every dollar above $94,316.

 

In writing this article, Planning for Prosperity (ABN 97 110 670 463), has not taken into account any particular person’s objectives, financial situation or needs. Before acting on this information, consider the appropriateness of this information having regard to your financial situation or needs. We recommend seeking financial advice specific to your situation before making any financial, investment or insurance decisions.

This entry was posted in Federal Budget, Financial Advice and tagged . Bookmark the permalink.
  • Sign up to our Newsletter

  • Ask a Question

    • Daniel Budreika
    • This field is for validation purposes and should be left unchanged.
  • Testimonials

    “With the advice we needed we were able to save thousands of dollars in fees and taxes relating to our superannuation alone. We restructured finances to better reflect our personal and family goals”

    “Right from my first meeting with Planning for Prosperity, Daniel was very open with me and has taken me through the process carefully and caringly with the aim to provide the best financial advice.”

    “They investigate and consider an array of options and variables, of which some we had not considered… It is a complete package that we feel confident and secure in, with our financial matters being optimally managed within a very open, approachable and professional environment.”

  • General Advice Warning

    Please view our General advice warning here.