Budget 16 Property & Tax Changes


Negative gearing has thankfully been ruled out as an area the coalition will be attacking to provide budget savings. Any policy which creates a disincentive to self-fund your retirement is a ludicrous one in our view. Not to mention the net tax result of a diminishing property market.


So what has changed in the world of tax depreciation? Well there’s some great news for small businesses, with the instant asset write off being extended. The threshold for qualification has also been revised upward. The definition of ‘small business’ as at 1 July 2016 now means businesses with a turnover of less than $10 million.


We’re expecting some new depreciation legislation on effective lives to be introduced within the next 60 days. This will supersede TR 2015/2 and will likely include some new commercial industries and tweak some commercial effective lives. It’s been some time since we’ve seen a change to residential properties, but we’ll be looking at that one closely.


Over and above property and depreciation, here’s a brief overview of the major budget announcements;

  • Increase to the upper limit of the 37c tax bracket from $80,000 to $87,000
  • Company tax rate cut to 27.5%
  • Incentives for employing young people
  • Investors in Early Stage Innovation Companies for a 20% tax offset for amounts invested up to $200k per annum.
  • Maximum of $25,000 per year now for super contributions, down from $30,000 limit if you are aged under 50 or $35,000 if aged over 50. This will apply from 1 July 2017.
  • Any earnings on your super balance over $1.6 million will be taxed at 15%