Budget 2017: What it means for you

If you’re a first-home buyer …
Young people saving for a deposit on their first home will be able to use their superannuation as a sort of supercharged savings account.
From July 1, savers will be able to salary sacrifice from their pre-tax income extra amounts over the compulsory superannuation contribution, up to a maximum of $30,000.
You will be able to withdraw that cash, along with any earnings, from July 1, 2018. The deposit will attract the tax benefits of superannuation — contributions and earnings will be taxed at 15 per cent, and withdrawals will be taxed at 30 per cent below the marginal tax rate. Treasurer Scott Morrison says the scheme will accelerate savings by “at least 30 per cent” compared with a typical deposit savings account.

If you’re a baby boomer with a big house …
You’re being encouraged to sell it to make way for “younger, growing families”. From July 1, 2018, people aged 65 or over will be able to make a non-concessional superannuation contribution of up to $300,000 from the proceeds of their primary residence, provided they have lived there for at least 10 years.
The “downsizer” contribution, which both members of a couple will be able to take advantage of, is in addition to the current contribution rules and caps, and will be exempt from the existing age test, work test and the $1.6 million balance test for making non-concessional contributions.

If you’re a property investor …
Negative gearing rules for property investors are being tightened. You will no longer be able to claim tax deductions for travel expenses related to owning and renting an investment property, due to widespread rorting of the system with people claiming deductions for private travel.
And rules are also being tightened around depreciation deductions for plant and equipment items such as washing machines and ceiling fans. From budget night, you will only be able to claim the deductions if you actually purchased the item yourself. In the past, successive investors were able to claim depreciation on the same items, well in excess of their value.

If you’re a foreign investor …
Foreign investors in Australian property will no longer be able to claim primary residence exemption for capital gains tax purposes, in a measure which is expected to bring in an extra $581 million over the next four years. And if you buy a property only to leave it empty or fail to rent it out for at least six months of the year, you’ll be slugged with a “ghost tax” equal to the foreign investment application fee you paid at the time of application, which will work out to at least $5000. Foreign investors will also be limited to a 50 per cent of purchases in new developments, to give Australian buyers the opportunity.

Read the full article at news.com.au