The Turnbull Government has released its latest Federal Budget and although it does not contain any of the earth shattering superannuation reforms that the previous budget did, it still has many measures which will impact individuals and small businesses moving forward. Here is a summary of these proposed measures: –

Individuals

• From 9 May 2017, rental property investors will only be able to claim plant & equipment depreciation for items they have purchased and installed. Any items purchased with the property will be included in the cost base of the property. Any existing properties are not impacted and all properties will still be able to claim 2.5% depreciation on building costs.
• From 1 July 2017, taxpayers will be unable to claim for travel costs associated with rental properties (i.e. to inspect or repair rental properties).
• From 1 July 2019 the Medicare levy will be increased from 2% to 2.5%.
• From 1 July 2018 the HELP repayment thresholds will change with the lowest threshold beginning with a 1% repayment for individuals earning over $42,000 and the top threshold with a 10% repayment for individuals earning over $119,882.

Small Businesses

• The immediate $20,000 asset write off will be extended by 12 months until 30 June 2018.

Superannuation

• From 1 July 2017, first home buyers will be able to save their deposit by contributing into superannuation. The proposals allow for voluntary contributions of up to $15,000 per year up to a total of $30,000 with these contributions taxed at 15% for deductible contributions.
• From 1 July 2018, taxpayers aged 65 or over who are downsizing their home will be able to contribute up to $300,000 of the proceeds of sale into super (i.e. up to $600,000 per couple). Although this contribution will not be subject to any of the existing contribution tests and caps it will count towards the assets test for age pension purposes.

If you are concerned about how these measures may impact you or would like further information, please do not hesitate to contact us.