Income tax cuts brought forward
This financial year, some 11 million individuals will benefit from income tax cuts being brought forward. For those earning between $48,000 and $90,000, the relief will be $1,080. Those earning between $90,000 and $120,000 will receive between $1,080 and $2,430 in tax relief and anyone with incomes above $120,000 will end up with the maximum $2,430.
Surplus super fees addressed
When we change jobs, we often automatically end up with a new super account. As a result, tonnes of us have multiple accounts (6 million additional accounts, in fact!) and are possibly paying extra fees. The total of superannuation fees amount to more than our gas and electricity bills combined. From next financial year, if you change employers your super account will in most cases follow you.
- Underperforming MySuper products won’t be allowed to receive new members until their performance improves.
- Super trustees will need to make sure their actions are consistent with members’ retirement savings being maximised.
There was little movement on a number of previously announced super measures.
- The proposed change to increase the age for non-concessional contribution bring-forward purposes to age 67. The bill to enact this previously announced measure is still before parliament.
- The COVID-19 temporary early release of super measure. Eligible Australian and New Zealand citizens and permanent residents continue to be allowed just one withdrawal opportunity of up to $10,000 from 1 July 2020 until 31 December 2020.
- The government restated the deferred start date for previously announced self-managed super fund (SMSF) measures.
– Increasing the maximum number of members allowed in an SMSF from four to six.
– Changes to the calculation of exempt current pension income.
Full tax deductions for assets
Every business in Australia (except the top 1%) if that’s you keep scrolling, will be able to deduct the full cost of new capital assets purchased after budget night (6 October 2020) as long as the asset is first used in the business by 30 June 2022. There is no dollar limit on the asset’s capital value, which makes this proposal very appealing to many businesses.
Small and medium businesses with annual aggregated turnover of less than $50 million will also be able to apply “full expensing” to second-hand assets.
Eligible companies will be allowed to carry back tax losses from the 2019-20, 2020-21, or 2021-22 income years to offset previously taxed profits in 2018-19 or later income years.
Thinking about leveraging this for your business? Let me know, I can help you get this sorted.
Additional business assistance:
- Businesses taking on a new apprentice will be eligible for a 50% wage subsidy, up to certain limits.
- Organisations taking on new employees may qualify for the new JobMaker Hiring Credit. Depending on the age of the new employee, a weekly credit of $200 (for each new employee aged 16 – 29) or $100 (for each new employee aged 30 – 35) will be available to eligible employers over 12 months from 7 October 2020 for each additional new job they create for an eligible employee.
- Employers who provide retraining and re-skilling benefits for redundant, or soon to be redundant, employees where the benefits may not be related to their current employment will be eligible for an exemption from the 47% fringe benefits tax.
First home buyers incentivised
Normally a home buyer needs to save a deposit totalling 20 percent of the purchase price (or take out lenders mortgage insurance). As part of the Federal Budget, 10,000 additional first home buyers will be able to buy with as little as a five per cent deposit.
Applications, which are made through participating lenders, will be available until 30 June 2021.
Eligible first home buyers may also be able to take advantage of the First Home Super Saver Scheme to use the concessionally taxed superannuation system to save their first home deposit.
In addition, under the HomeBuilder Scheme, existing owner-occupiers, including first home buyers, may be eligible for a grant of $25,000 to build or substantially renovate an existing home. First home buyers may also be eligible for state and territory grants and concessions.
These measures are designed to promote home ownership and support employment in the construction industry.
If you are considering applying for the First Home Loan Deposit Scheme, don’t wait! I can help you understand if you’re eligible, navigate through the process and find the most competitive home loan rate for your situation. We’ll need to get in quick, places are limited.
A broker who works for you
Even though it can sound like a lot of noise, the release of the Australian budget is a good time to reflect and ponder your own budget and goals. I’m here to help – whatever you might need. Simply call or email and let’s discuss how I can support you.
Disclaimer: This document has been created by Green Financial Services Group Pty Ltd trading as Green Finance Group (ABN 24 609 443 085, Australian Credit Licence number 390222). It provides an overview or summary only and it should not be considered a comprehensive statement on any matter.You should before acting in reliance upon this information seek independent professional lending or taxation advice as appropriate specific to your objectives, financial circumstances or needs. Information included has been sourced from third parties and has not been independently verified. Accordingly, Green Finance Group is not in any way responsible for nor provides any warranty express or implied as to its accuracy or relevance.