The top 5 points to take away from the 2017 budget if you’re a home owner or property investor:
- In what has been an idea floated numerous times (and shot down), it’s the old policy of the “first home saver accounts” introduced by Labor. The federal government has given into public pressure on housing affordability and receive concessional tax treatment on contributions by being able to salary sacrifice, and the earnings will also be taxed at a concessional rate.
- Importantly there will be here will be caps on the amount that can be contributed annually to the account and also an overall cap on the size of the fund. There won’t be an age limit on who can set up this fund BUT it can only be used for the purchase of a first home.
- A “ghost tax” has been introduced to foreign investors. From a public perception point of view this is a great idea. It’s in the media a lot that many units/houses, especially in Melbourne, are being left vacant by foreign investors on purpose to allow them to negatively gear them. This will no longer be permitted; a levy of up to $5,000 can be imposed on foreign investors who leave the property vacant.
- Retirees who downsize by selling the family home will be offered exemptions from new superannuation limits. This means they can contribute up to $300,000 into their super, from the proceeds of their house sale.
- This last one is so important: Further roll-out of government’s City Deals between all levels of government and the private sector to develop urban areas. City Deals between the Australian Government, a state or territory government, and local governments will make our cities better places to live in and do business. Through City Deals, governments, industry and communities will develop collective plans for growth and commit to the actions, investments, reforms and governance needed to implement them. This is like a “Master Plan” and more importantly The focus is not just on capital cities and major urban areas – Australia’s regional centres are vital to the performance of the wider Australian economy. Improving their productivity and liveability will be addressed in City Deals.