On Tuesday night, the coalition outlined its Federal budget for the upcoming years. There were a few key points to take out when it comes to financial advice and superannuation.
Super Changes
Repeal of the work test – for those aged 67-74, you will no longer have to meet the work test to be eligible to make super contributions including non-concessional contributions and salary sacrifice. People in this age bracket will also be able to access to bring forward rule.
Downsizer contribution age reduced – eligible age will drop from 65 to 60, meaning if you are 60 or over and have owned your main residence for 10 or more years, upon sale, you will be able to contribute up to $300,000 per person from the proceeds into super without affecting your contribution caps.
Removal of the minimum income threshold for super guarantee payments – the $450 per month minimum income threshold for employers to pay super guarantee will be removed meaning super will be paid on all salaries paid by employers. This may not take effect until 2022/23.
First Home Super Savers Scheme – the amount of voluntary super contributions that can be released for the purchase of a first home has been increased to $50,000.
Home Ownership Proposals
Family Home Guarantee for single parents – 10,000 guarantees will be made over four years helping single parents purchase a property with as little as a 2% deposit, subject to the individual’s ability to service the loan.
New Home Guarantee – a further 10,000 places for first home buyers seeking to build or purchase a new home with a deposit as little as 5%.
Personal Tax Relief
Extension of tax offset – the low to middle income tax offset will be extended for the 2021/22 financial year and will be received when an individual completes their tax return. Worth up to $1,080 dependent on an individual’s income.
Business Tax Relief
Business expensing – continuation of the incentive for businesses with an annual turnover of less than $5 billion to deduct the full cost of eligible assets purchases for their business, including cost of improvements to existing assets. This will continue until 30 June 2023.
Some of these measures may not be implemented immediately and some measures may be required to go through the legislative procedure before they are introduced.
Call us to discuss how these initiatives might benefit you!