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How the 2017 Budget affects you

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Here is a summary of the 2017 Federal Budget by Dr Steve Enticott from CIA Tax.

We were out hosting a financial talk last night with a keen eye on the mobile phone, waiting with baited breath for the BIG budget night surprises!!

Nope nothing.

Then later in the evening sitting down (yes it’s what accountants do) to watch out for an ‘action’ replay of those BIG budget (highlights).

Again nothing, well nothing BIG anyway.

Yet plenty of small changes to keep us all amused, in particular:

  • The $20,000 instant asset write off has been extended another year for small businesses with a turnover of under $10m.
  • Medicare Levy increases to 2.5% (from 2%) from 1/7/2019
  • 2% Budget repair levy ends 30/6/2017
  • Travel to rental properties abolished 1/7/2017 - time for a last minute trip?

Plant and equipment depreciation deductions will be limited to outlays actually incurred by investors in residential real estate properties. Plant and equipment items are usually mechanical fixtures or those which can be “easily” removed from a property, such as dishwashers and ceiling fans – sadly we’ll need more ATO details/definitions on this one…

$42,000 will be the lowered HELP debt repayment level from 1/7/2018 albeit starting at a 1% repayment rate and rising upwards to 10% on incomes above $103,766.

Main residence CGT tax exemption abolished for non tax residents and temporary tax residents. We will need to be very careful when working (even temporarily) abroad with the selling of a family home.

First home owners will be able to access up to $30,000 of voluntary superannuation contributions made after 1/7/2017 for housing. Some tax savings to be considered here.

Housing downsizers over the age of 65 will be able to contribute $300,000 (each) from 1/7/2018 into superannuation, which will be very attractive to some, especially those unable to contribute further i.e. retired over the age of 65.

Overall somewhat quiet for a budget night, in what some commentators (who have struggled to find a label for it) have called an “infrastructure budget” or dare we say it, a “Jobs and Growth” budget! Albeit with some tinkering around the edges on the questions of housing affordability.

Together with the Tax Institute we've put together a review of what the budget means to you.

Read more about the Federal Budget 2017/18