Welcome to our May Newsletter
A lot has happened in finance this week. The Federal Government unveiled its 2016-17 Budget,
while the Reserve Bank of Australia decided to cut the cash rate to the new historical low
Pleasingly, Australia’s lenders were quick to follow suit, with many choosing to pass on the
rate cut in full to their customers. This is great news for anyone who has a mortgage and
those who are out there looking to enter the market.
The Federal Government’s 2016-17 Budget also contained some great initiatives for home buyers
and owners. Below are the key takeaways I took from last night’s Budget.
There's never been a better time to start taking advantage of these historically low interest
rates. To discuss your options, get in touch with me today.
Mortgage Choice’s CEO, John Flavell detailed analysis can be found on our website, by clicking
here John Flavell - Budget Analysis
2016/17 Budget Wrap Up Treasurer Scott Morrison made it abundantly clear that there was not
going to be any changes made to negative gearing, stating the issue was firmly ‘off the agenda’.
According to Mr Morrison, changes to negative gearing would only serve to ‘undermine the value
of an Australian’s investments’.
But while negative gearing was kept off the table, changes to superannuation, income tax
and small business tax were all discussed at length.
* Superannuation: People with super balances over $1.6 million can no longer roll all savings
into retirement funds with tax-free earnings.
Further, the Government announced it would lower the income threshold at which the 30%
(rather than 15%) tax rate kicks in on superannuation contributions from $300,000 to $250,000.
These key changes are only expected to hit high income earners (or less than 4% of the
* Small Businesses: From 1 July 2016, small businesses with a turnover up to $10 million will
pay a reduced company tax rate of 27.5%. Furthermore, businesses with a turnover of
$100 million will gradually receive the 27.5% tax rate by 2020.
These changes are great news for small business owners who will now have more money in their
back pocket to re-invest in their business, people and assets.
* Income Tax: The 32.5% tax threshold will be increased from $80,000 to $87,000.
This equates to a saving of $6 per week for those earning between $80,000 and $86,999 (inc).
* Tax Avoidance: The Government will crack down on multinational corporations and wealthy
individuals who aren’t paying tax on money earned in Australia.
This particular initiative is expected to raise more than $3.7 billion in tax liabilities by
2020 and, once again, only affect wealthy Australians.
What is? Buying a property sounds so simple until you enter the world of jargon and
professional terminology, then suddenly it all becomes confusing.
Our website is quickly becoming the 'go to' for our clients as we continue to add
to our 'What is' series of short answers to the most commonly asked questions such as:
- What is the Difference Between Joint Tenants and Tenants in Common?
- What is Capital Gains Tax?
- What is Stamp Duty?
And just to make it all easy, click here for our 'Contents' page and keep checking back
for our upcoming articles.
Call me on 075562 0748 or email email@example.com