Call 1300 805 221or

Federal budget 2017: Five housing changes to know about

May 29, 2017

Housing was a hot button topic for the 2017/2018 federal budget, so it’s no surprise there were a raft of changes for real estate.

The new measures have impacted on a variety of housing rules from first-home buyers’ savings strategies to what investors can claim at tax-time.

Here are the five big announcements to know about.

1) Foreigners can only buy up to 50 per cent of a development
Under the new budget rules, developers will no longer be able to sell every property in their new development to overseas buyers.

Instead, a maximum of half the development can be sold to foreign buyers with the rest to be sold locally. The budget documents note this is to provide a “clear message” that new housing stock is expected to increase supply for Australian buyers.

Before this change developers required pre-approval to sell properties to foreign buyers but there was no limit on the proportion of sales.

Effect on revenue: No impact

In place from: May 9, 2017

2) First Home Super Saver Scheme
First-home buyers weren’t ignored by the budget with a new First Home Super Saver Scheme announced. The new super saver scheme will allow first-time buyers to put up to $15,000 a year, to a maximum of $30,000 under the scheme, into their superannuation.

These funds can later be withdrawn for a home deposit, including any earnings the deposits made.

This means they will have a tax incentive to save more, and it can be taken advantage of as a couple with each claiming $30,000.

Effect on revenue: Cost of $250 million ($9.4 million funding given to ATO)

In place from: July 1, 2017 (contributions), July 1, 2018 (withdrawals)

3) An ’empty home’ tax on foreign investors
Foreign investors who keep properties vacant for more than six months will be faced with a vacancy tax. This is described as a charge on “underutilised residential property”.

The cost of this tax will be the equivalent of their foreign investment application fee – some several thousand dollars – and will be charged annually.

This change is intended to get more vacant homes onto the rental market.

Effect on revenue: Gain of $16.3 million ($3.7 million funding given to ATO)

In place from: May 9, 2017

4) Stopping investors from claiming travel deductions
Investors who previously had tax deductions for travel expenses related to their investment property will no longer be able to make these claims.

The government has ruled them out, even for those travelling to collect rent, maintain or inspect a premises, saying many have been incorrectly obtaining this deduction. This has included situations for “private travel purposes”.

Effect on revenue: Gain of $540 million

In place from: July 1, 2017

5) Retirees given incentives to downsize
Australians aged over 65 who sell their home of a decade or more will soon be able to put up to $300,000 in sale proceeds into their superannuation.

This incentive to downsize is expected to help free up larger homes for families to move into.

 

(source:domain)

Tags: , , , , , , , ,

Share on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Email this to someone

Better Choice Mortgage Services is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within this website. While the information contained within this website is periodically updated, no guarantee is given that the information provided in this website is correct, complete, and up-to-date. Although the Better Choice Mortgage Services website may include links providing direct access to other internet resources, including websites, Better Choice Mortgage Services is not responsible for the accuracy or content of information contained in these websites. Links from Better Choice Mortgage Services to third-party sites do not constitute an endorsement by Better Choice Mortgage Services of the parties or their products and services. The appearance on the website of advertisements and product or service information does not constitute an endorsement by Better Choice Mortgage Services, and Better Choice Mortgage Services has not investigated the claims made by any advertiser. Product information is based solely on material received from suppliers. Advanced Finance (Pty) Ltd t/a Better Choice Mortgage Services are not financial planners or accountants and we would encourage our clients to seek professional advice before acting on any a financial or taxation information in this news post.
Get Connected