And this is a great thing for the hip pocket of many Australians. Below we look at what the Coalition win will mean for your finances.
No changes to negative gearing or capital gains tax on the cards under a Coalition government. The stability in a re-elected government, will hopefully increase confidence in the housing market. Predicted interest rate cuts could also provide the housing market with a much-needed boost.
First Home Buyers
As part of its election campaign, the Coalition government promised to help First Home Buyers by introducing the First Home Loan Deposit Scheme. This means that up to 10,000 first home buyers will be able to buy their first property with only a five per cent deposit. Their loan will also be ‘guaranteed’ by the government. This means first home buyers will not need Lenders Mortgage Insurance, potentially saving up to $10,000.
A centrepiece of the Coalitions 2019 budget was $158 billion in tax cuts which will be implemented over the next ten years. The first of the cuts will see an immediate tax benefit with access to the Low to Middle Income Tax Offset (LMITO) for people earning up to $126,000 per year. This results in, tax relief of up to $1080 for singles or $2160 for couples in the 2018-2019 financial year.
On top of this, the government will also introduce further structural tax reform lowering the 32.5 per cent tax rate to 30 per cent from 2024-25. Combined with the already legislated abolition of the 37 per cent tax rate from 1 July 2024, this means a single 30 per cent marginal tax rate will apply to taxable incomes from $45,000 to $200,000. This means that a projected 94 per cent of Australian taxpayers will face a marginal tax rate of no more than 30 per cent in 2024-25.
The big win for self-funded retirees is there will be no change to Franking Credit Refunds on Australian share dividends under the Coalition Government. The Coalition also plan to scrap the work test for voluntary super contributions for people aged 65 or 66.
Small Business Owners
The big one to watch out for is the Coalitions promise to cut taxes for small businesses to 27.5%. In addition to that, to cut taxes to 25% by 2021-2022.
The increase in the Instant Asset Write-Off Threshold to $30,000 has already been legislated. This has been extended to 30 June 2020. This scheme has also been expanded to include medium-size businesses with a turnover up to $50 million.
Overall regardless of which category you fit into, you will save money. Use this wisely to invest in your future. Buy good quality property while it’s cheap or invest in shares and secure your financial future.
Still have questions and doubts? Let us know here! We will get back to you.