Article published 19 August 2021
Here’s some great news. Chances are your home is probably your most valuable asset. It’s also likely to be one of the few remaining assets that are free from capital gains tax.
The tax-free status of our homes means that no matter how much profit you make when you sell your place, you won’t normally pay a cent of tax.
For the past two financial years, our homes have also been a potential source of tax savings during lockdowns. If you’ve worked from home as a result of COVID, you may have been able to claim the ‘temporary shortcut method’ of deducting work from home expenses.
Claims are based on a fixed rate of 80 cents for each hour worked from hour. This tax break was introduced in April 2020 and extended through to 30 June 2021.
At this stage the temporary shortcut method hasn’t been extended past 30 June 2021. There have been calls from the accounting industry experts for the method to be extended for another year, or made a permanent feature of our tax system1. Right now though, it’s a case of watch this space to know if workers will be able to claim the 80 cents per hour worked from home in the current financial year.
First home buyers don’t miss out
Buying a home inevitably means paying stamp duty. It’s a state-based tax so rates vary according to where you buy, but it’s typically based on the price you pay for your home.
The common thread is that stamp duty is not cheap. In Sydney for example, buying a house for the city-wide median value of $1.2 million, can mean paying duty of $50,500.
That’s a significant expense for first home owners. The good news is that first home buyers can take advantage of opportunities to reduce or avoid stamp duty altogether.
In Victoria for instance, first home buyers can score an exemption on stamp duty when they buy a new or established home valued up to $600,000 after July 1 20172. In Queensland, the first home concession can deliver savings of up to $15, 925 when you buy a first home valued under $550,0003.
To know the stamp duty savings available to first home buyers in your part of Australia, head to the Mortgage Choice Stamp Duty Calculator or speak with your local Mortgage Choice broker.