Federal Budget 2020-21: What’s in it for you?

The Coronavirus pandemic has delivered a tough blow to the Aussie economy, and the 2020 Federal Budget is all about fighting back – and first home buyers, homeowners and small businesses are among the winners.

Published 7 October 2020

Budget impacts for Homebuyers

The First Home Loan Deposit Scheme (FHLDS) helps eligible first home owners get into the market with just a 5% deposit and no lenders mortgage insurance because the government guarantees your loan.

The Scheme was initially limited to 10,000 first home owners each financial year. The Budget has doubled that number to 20,000. 

Applicants will need to build a new home or purchase a newly built home eligible for the FHLDS but the property price limits have been increased. Check out the new price caps in Table 1.

Call your local Mortgage Choice broker today to find out if you’re eligible for the First Home Loan Deposit Scheme, and start the ball rolling on buying your own home!

Table 1 Extended First Home Loan Deposit Scheme price limits

State/Territory

Capital city/regional centre

Rest of state

NSW

$950,000

$600,000

VIC

$850,000

$550,000

QLD

$650,000

$500,000

WA

$550,000

$400,000

SA

$550,000

$400,000

TAS

$550,000

$400,000

ACT

$600,000

N/A

NT

$550,000

N/A

Source: Housing Minister and Assistant Treasurer

The new HomeBuilder scheme provides $25,000 in cash to eligible new home builders or renovators but it is due to end on 31 December 2020, and this deadline was not extended as part of the Budget.

If you’re keen to tap into the $25,000 HomeBuilder cash grant, contact your local Mortgage Choice broker urgently – time is running out.

Thinking of adding a granny flat to your backyard? It just became more attractive. 

Building a granny flat for an elderly relative or for those with permanent disabilities,  will be cheaper from July 1 next year as capital gains tax will no longer have to be paid.2

Talk to your local Mortgage Choice broker about funding options for your granny flat.

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Speak to your local broker to see how the budget changes can benefit you.

Big news for small business

From 6 October 2020 until 30 June 2022, businesses with turnover of up to $5 billion will be able to immediately write off on tax the full value of any eligible asset purchased for the business.

That’s great news for your small business! It’s a supersized extension of the $150,000 instant asset write off, which was scheduled to end on 31 December 2020. It means you can invest in new equipment to boost productivity or explore new product lines, while pocketing valuable savings on tax. 

Even better, it’s an opportunity to take advantage of super-low interest rates on business loans to fund new equipment.

Talk to your local Mortgage Choice broker about competitively priced asset finance that helps your business grow.

The new JobMaker scheme pays businesses to hire JobSeeker recipients. It’s worth $200 a week for each new employee aged 16-29, or $100 weekly for new eligible employees aged 30-35. The scheme will run until 6 October 2022, and your new hire(s) needs to work at least 20 hours each week to be eligible.

The Budget announced a loss carry-back scheme that will let businesses, which were profitable last year claim back some of the taxes paid.

Losses incurred to June 2022 can be offset against prior profits made in or after the 2018-19 financial year. If your business is eligible, the tax refund will be paid when you lodge your 2020-21 and 2021-22 tax returns.

Personal tax cuts – more cash to buy or pay off your home

If you’re saving for a first home, or paying off your home, tax cuts mean extra money to get ahead sooner.

The Federal Budget is bringing forward planned tax cuts by two years, to give more than 11 million Australians a tax cut backdated to 1 July this year.

The 19% tax threshold is being raised from $37,000 to $45,000, and the 32.5% threshold will jump from $90,000 to $120,000. The Low and Middle Income Tax Offset, which was due to be phased out, will stay with us for another year.

The upshot is that more than 7 million Australians will receive tax relief of $2,000 or more this year. Low and middle income earners will receive a tax break of up to $2,745 for singles, and up to $5,490 for dual income families.

If you’re on a high income of, say, $80,000 annually, you’ll have an extra $83 in your pocket each fortnight, rising to $99 fortnightly if your annual income is $140,000.2

Need more information?

Bear in mind, the Budget initiatives will need to pass through Parliament before they take effect. Contact your local Mortgage Choice expert today to know how you can start achieving your property goals – and for more information on how the 2020 Federal Budget can help you get there.


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1 https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/removing-capital-gains-tax-granny-flats
2
 https://www.ampcapital.com/au/en/insights-hub/articles/2020/october/the-2020-21-australian-budget