We’ve just started the new financial year, which means a lot of tax policy changes are now in effect as of 1 July 2017. There are many changes that will be affecting people in different financial positions and pursuits. Property investors will be hit the hardest with these new changes, while some experts believe the changes to stamp duty will just end up driving housing prices even higher. Smaller businesses can enjoy the same capital gains concessions they’ve been accustomed to as well as Simpler BAS reporting, which will help reduce their overheads.
Stamp Duty Concessions for First Home Buyers
One big topic of interest in today’s media is housing affordability, particularly in capital cities like Sydney and Melbourne. To try and make home ownership more accessible, the NSW government has made changes to stamp duty charges for first home buyers. There are two major changes in effect from 1 July:
Stamp duty on homes up to $650,000 has been abolished for first home buyers.
There are also significant concessions available for first home buyers purchasing homes up to $800,000
This is potentially great news for first home buyers with the concessions increasing the buying power of first home owners.
Stamp Duty Changes for Investors
As part of the same effort to increase housing affordability, property investors will no longer be able to access stamp duty deferral. From July 1 all investors will have to pay stamp duty charges up front. The NSW government hopes this will mean less competition for first home buyers from investors.
Limitations on Deductions for Investors
Property investors generally are getting a bit of a raw deal this financial year, with new limitations placed on plant and equipment depreciation deductions. Investors will no longer be able to claim depreciation for plant or equipment on their property that was purchased by a previous owner. Now they will only be able to claim depreciation for plant and equipment for a property that they purchase themselves. Joining the list of deductions introduced on July 1, investors will no longer be able to claim are travel expenses relating to the inspection, maintenance or collection of rent for a rental property. It is believed that currently, property investors are able to claim too many deductions and many investors pay little to no tax at all because of this.
Changes to Small Business Capital Gains
The government is amending concessions on the small business capital gains tax (CGT) to make sure it can only be claimed for assets used in a small business or ownership interests in a small business. This only affects tax payers who were able to arrange their affairs so that ownership interests they had in much larger business did not count towards the eligibility requirements.
Simpler Business Activity Statements
There’s good news for businesses in the new tax policies for 2017. From July 1 there will now be simpler BAS reporting. Simpler BAS means that GST bookkeeping and reporting will now be less complex, which will reduce your compliance costs. All businesses that have a turnover of less than $10 million will automatically be eligible for simpler BAS. If you’re eligible then it's very easy to access. If you normally lodge online, then you’ll be automatically sent a BAS requiring less GST information. If you lodge the old fashioned way, with paper, then you only need to complete a few forms. For more information on what you need to do you can click here.
Need help with this year’s tax return?
If you want to get the best returns possible on this year’s tax return, contact Etax Plus. Our experienced tax professionals are well-versed in the changes. We'll get your tax completed promptly, leaving you one less thing to take care of.
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