July 1 is a date in everyone’s calendar. Not only is it the start of the new financial year, and the halfway point in the calendar year, but also the date when many of the state and federal budget initiatives come into effect. Here is a roundup of what’s changed around the country and in each state when the clock ticked over.
- Commencement of the Major Bank Levy on NAB, ANZ, CBA, Westpac and Macquarie as announced in the Federal Budget. (Anticipate increases in home and commercial lending rates)
- Investors who previously had tax deductions for travel expenses related to their investment property will no longer be able to make these claims even for those travelling to collect rent, maintain or inspect premises.
- Starting July 1, first-time buyers will be able to put up to $15,000 a year, to a maximum of $30,000 under the scheme, into their superannuation. These funds plus earnings can be for a home deposit. Essentially this means a tax incentive now, with a homebuying incentive later. Withdrawals can happen as of July 1, 2018.
- The corporate tax rate reduced from 30.0% to 27.5% for businesses with a turnover between $10 million and $25 million. Business with a turnover of less than $10 million already have a company tax rate of 27.5%. Business with a turnover between $2 million and $10 million will now be eligible for the instant asset write off initiative and will able to immediately deduct purchases of eligible assets costing less than $20,000 first used or installed ready for use by 30 June 2018. Businesses with a turnover less than $2 million are already eligible for the accelerated depreciation initiative.
- Foreign tax residents will be subject to an increased CGT withholding rate of 12.5% (up from 10%) and a reduced CGT withholding threshold of $750,000 (down from $2 million).
- The national minimum wage will increase by 3.3% ($22.20 per week) to $694.90 per week ($18.29 per hour) and the 122 modern awards will also increase by this percentage.
(Source: Elite Agent Budget Wrapup/Sarah Bell)
- Stamp duty concessions come into play abolishing all stamp duty for first home buyers on existing and new homes up to $650,000 and stamp duty discounts up to $800,000. There is also a $10,000 grant for those eyeing new homes up to $600,000.
- The concession for residential off-the-plan purchases has been tweaked in that only first-homebuyers will have up to 12 months to pay. Previously this was open to everyone but as of 1 July, that is no longer the case.
- The foreign investor surcharge will increase from 4 to 8 per cent on housing stamp duty and overseas buyers will pay a 2 per cent surcharge on land tax, up from 0.75 per cent.
- Application fees for foreign purchases of residential properties valued at less than $10 million will increase by 10 per cent on the current fees.
- Foreign owners of residential property will be hit with an annual vacancy charge on property that is not occupied or genuinely available on the rental market for at least six months each year. The charge will be equivalent to the relevant foreign investment application fee imposed on the property at the time it was bought by the foreign investor.
- NSW Department of Fair Trading has also put up a number of their Property, stock and business agents fees. There are also discounts if the application is lodged online (10% or $5 whichever is greater)
(Source: Elite Agent NSW Budget Wrapup)
- The 2017-18 Queensland Budget provides additional funding of $30 million to extend the temporary increase in the Queensland First Home Owners’ Grant from $15,000 to $20,000 for another six months.The increased grant will be extended to eligible transactions entered into from 1 July 2017 to 31 December 2017, for buying or building new houses, units or townhouses valued at less than $750,000.
- A 1.5% surcharge will be introduced for absentee payers of land tax, applying to land holdings of $350,000 or higher in addition to other land tax payable (does not apply to Queensland residents but anticipated to impact on property investment).
- Council rates across Queensland will rise. Brisbane (2.4%), Gold Coast (1.8%), Sunshine Coast (2.3%), Logan (1.7%), Moreton Bay (3.99%), Western Downs (2.9%), Bundaberg (3.45%), Redlands (2.73%), Cairns (1.75%), Townsville (1.48%), Ipswich (2.95%).
- Water and sewerage charges increase by 2.3% in Greater Brisbane (Queensland Urban Utilities) and 3% in SEQ (Unity Water).
- First-home buyers who build a new home in the city are eligible for a $10,000 First Home Owner Grant but their regional counterparts can double that.
- Stamp duty has been completely cut on first-home buyer purchases of $600,000 or less and reduced for homes priced up to $750,000.
- The ‘Homes for Victorians’ initiative offers first-time buyers the opportunity to co-purchase their home with the State Government, which is expected to help 400 people in the pilot scheme will continue.
- Transfers between spouses: the existing stamp duty exemption for transfers of properties between spouses will be removed (but the existing stamp duty exemption applicable to transfers of principal places of residence between spouses, and transfers following a relationship breakdown, will remain).
- Land tax: the current biennial property valuations will be undertaken annually and the property valuation process will be centralised within the Valuer-General Victoria.
- Off-the-plan: for contracts entered into from 1 July 2017, the off-the-plan concession for new properties will be limited to buyers that qualify for the first home buyer or principal place of residence stamp duty concession
- Transfer duty rates: an increase in the maximum stamp duty rate (from 5.45 percent to 5.95 percent) for conveyances, including landholder duty, for contracts signed on or after 1 July 2017 where the dutiable value is $3m or more but less than $5m, the rate is 5.75 percent of the dutiable value and where the dutiable value is $5m or more, the rate is 5.95 percent of the dutiable value
- First home buyers: For first home buyers there is no stamp duty on the first $500,000, and a discount of up to $23,928 up to the value of $650,000, on established homes.
- Like NSW and Victoria, the Government will also begin charging land tax on vacant properties from July 2018.
- A jump in rates the Government collects will be felt from July this year when rates rise 7 per cent on average for Canberra homes. Unit rates will jump by an even higher 19 per cent the coming financial year as the Government changes the way it calculates rates for apartments and units. To ease the pain, a $100 rebate will be on offer to unit and apartment owners. Discounts for early rate payments will be halved from July as well.
(Source: ABC News)
- The fee for issuing a Land Tax Search certificate will increase from $11.47 to $11.62 from 1 July 2017. (Note this does increase every year!)
- The extension of the $20 000 First Home Owner Grant for one year from 1 July 2017 to 30 June 2018.
- The introduction of a payroll tax rebate scheme for employers of eligible apprentices, trainees and youth employees who commence employment between 1 July 2017 and 30 June 2019.
- The Tasmanian Government announced partial duty relief for most types of house and land package purchases, through amendments to be made to section 19(2) of the Duties Act 2001 which come into effect on 1 July. These are mostly to do with calculations as they relate to improvements.
(Source: Tas Dept of Treasury and Finance)
- Foreign investors will have to pay a 4 percent conveyance duty surcharge on residential properties from 1 Jan 2018
- Stamp duty concessions of $15,500 for off the plan apartments which were due to end at the end of this FY will be extended for a further 12 months. Further, first homebuyers who purchase an apartment off-the-plan could be entitled to more than $40,000 in assistance under State Government measures to stimulate jobs and activity in the building industry. People who have previously owned a home will be eligible to receive up to $25,500.
- A new measure to exempt investors from land tax for five years if they buy eligible off-the-plan apartments.
- A new $10,000 pre-construction grant for the next three months for off the plan apartments in buildings yet to be built
- A new $40 million Fund my Neighbourhood program to be launched in July where local communities can nominate and vote on neighbourhood improvement projects
- A bank levy from July 1 that is expected to raise $370m over the next three years
- Job Accelerator Grant payments will be increased by up to $5,000 for businesses that hire apprentices or trainees. The additional grant will be backdated to 1 July 2016.
- From 1 July 2017, payroll tax rate for small businesses with taxable payrolls between $600,000 and $1 million will be reduced from 4.95 percent to 2.5 percent.
- Lastly, if you or one of your clients have a something to sort out with SACAT, from July 1 they have increased a number of their application fees.
- From July 1, 2017, first home buyers purchasing or constructing a new home will remain eligible for the $10,000 first home owner grant (down from the current level of $15k). Some are speculating even this is under threat though!
- In addition, eligible first home buyers purchasing a new or established home will continue to be exempt from duty on homes valued up to $430,000 or vacant land valued up to $300,000, and to receive a concessional rate of duty on homes valued up to $530,000 or vacant land valued up to $400,000.
(Source: ABC News)
A couple of other things that you may notice:
- The ‘Netflix Tax’ – The Australian Tax on digital downloads (like books, movies, streaming services and smartphone apps) kicks in on July 1. This is designed to even the playing field for local businesses. Expect prices to rise.
- For those of you that are heading off on holidays shortly in search of warmer weather a bit less admin for you – the outgoing passenger green card is no more.
- Speaking of passengers, the new occupation list for 457 Visas came into effect. So you can be assured that your job as a real estate sales agent (property managers, principals and buyers agents too) will not be taken by someone from overseas.
Until next year…
- The new strata building bond and inspection scheme in NSW will now commence on 1 January 2018. It was originally scheduled to commence on 1 July 2017.
- Starting on July 1, 2018, as an incentive for seniors to downsize and free up larger homes for families if you happen to be over 65 and in your home for 10 years or more, you will be able to put up to $300,000 in sale proceeds into their superannuation.
- In the ACT, the Government’s initiative to replace stamp duty with increased land taxes moves forward another step, and from July 1, 2018, commercial properties worth less than $1.5 million will not be subject to stamp duty.
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