- 2% budget deficit levy on incomes greater than $180,000 will not be extended, and will cease in the 2016-17 financial year.
- The tax rates for the 2017-17 and 2017-18 financial years have not changed.
- Current Low Income Tax Offset rates have not changed.
- The Medicare levy will increase from 2% to 2.5% from 1 July 2019 to ensure that the National Disability Insurance Scheme is fully funded, and to guarantee Medicare.
- Low -income earners will continue to receive relief from the Medicare levy through the low-income thresholds for singles, families, seniors and pensioners.
- From 1 July 2018, the minimum repayment threshold for HELP will be $42,000, with a lower repayment amount of 1% and minimum repayment threshold will increase with CPI indexation from 1 July 2019.
- From 1 July 2018, the Government will implement a consistent 30 cents in the dollar income test taper for Family Tax Benefit Part A families with a household income in excess of $94,316. This will ensure that higher income families are subject to the same income test taper rates.
- While talk of allowing individual taxpayers a standard tax deduction for work-related expenses has been around for some time, the budget was silent on this proposal so nothing to see here.
- Company tax rate reduced for companies with turnover less than $50m from 2019 and the rate gradually reducing to 25% by 2026.
- Increase small business aggregated turnover threshold to $10m from 1 July 2018, but small business concession threshold remains at $2m.
- Extend current instant write-off for asset purchases under $20k for small businesses for another 12 months to 30 June 2018.
- Extend reportable payments system to include couriers and cleaners.
GST & Indirect Tax
- Nothing major, but purchasers of newly constructed residential properties (or new subdivisions) will be required to remit the GST directly to the ATO as part of settlement.
- Again no major changes not previously announced.
Position as per prior year;
- Concessional contributions limit of $25,000.
- Limit on tax-free pension account balances to $1.6m.
- Expanded deductibility for personal contributions.
- Lifetime non-concessional contribution limit of $500,000
- 30% tax on contributions for those on incomes above $250,000.
- From 1 July 2017, “plant and equipment” depreciation deductions limited to outlays actually incurred by investors in residential real estate properties. This is an integrity measure to address concerns that some “plant and equipment” items are being depreciated by successive investors in excess of their actual value. Acquisitions of existing plant and equipment items will be reflected in the cost base for CGT purposes for subsequent investors.Existing investments grandfathered.
- Travel expenses related to inspecting, maintaining or collecting rent for a residential rental property will be disallowed from 1 July 2017
- From 1 January 2018 the CGT discount for individuals will be increased from 50% to 60% for gains relating to investments in qualifying affordable housing.
- Foreign and temporary tax residents will not be able to access the CGT main residence exemption for properties purchased after 7:30pm on 9 May 2017 (with existing holdings being grandfathered until 30 June 2019).