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I pay the Medicare Levy:
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Currently, the Medicare Levy is 2.0% of taxable income;
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It is proposed to increase this to 2.5%;
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The proposed effective date for this is 1 July 2019;
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IMPACT: this will increase your tax burden.
I receive Family Tax Benefit ('FTB') Part A:
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In the 2016 Mid Year Economic and Fiscal Outlook, it was announced that the maximum rate for the FTB Part A would be increased from 1 July 2017;
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The Budget has abolished this increase;
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IMPACT: families will not receive the increase.
I receive the Family Tax Benefit ('FTB'):
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Ordinarily the FTB payment rates are indexed each financial year;
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The Budget has abolished the indexation for the next two financial years. Indexation will resume on 1 July 2019;
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The proposed effective date for this is 1 July 2017;
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IMPACT: families will not receive the increase.
I receive one of the following payments: Age Pension; Disability Support Pension; Parenting Payment Single; Veterans' Service Pension; Veterans' Income Support Supplement; Veterans' Disability Payment; War Widow(er)s Pension or a permanent impairment payment under the Military and Compensation Act 2004:
I have a residential investment property and claim travel expenses related to it:
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Currently where a person has an investment property, deductions for travel expenses related to inspecting the property, maintaining the property or collecting rent are allowable deductions;
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It is proposed to disallow these expenses as deductions for residential investment property;
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The proposed effective date for this is 1 July 2017;
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IMPACT: you will have a higher taxable income and therefore pay a higher amount of tax.
I have a residential investment property and claim depreciation:
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Currently an investor can claim depreciation deductions for plant and equipment for both plant and equipment for which they have incurred the expense as well as for plant and equipment purchased by the previous owner of the property that has transferred to them;
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It is proposed to amend this such that an investor will only be entitled to claim a depreciation deduction for plant and equipment where the investor has actually purchased the plant and equipment. The depreciation deduction will cease on the earlier of the end of the useful life of the asset, or when the investor no longer owns the asset;
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The proposed effective date for this is 1 July 2017 however existing investments are grandfathered (including contracts already entered into at 7.30pm (AEST) on 9 May 2017);
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IMPACT: residential property investors will pay a greater level of tax.
My family income is over $350,000 per annum and I receive the child care rebate:
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The proposed effective date for this 1 July 2018;
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IMPACT: families with annual income over $350,000 will lose the child care rebate.
I have a small business and am considering purchasing an asset:
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Currently where a small business purchases an asset that costs less than $20,0000 the small business can deduct the purchase price (as opposed to depreciating the asset). This was due to end on 30 June 2017;
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It is proposed to extend this initiative for a further 12 months to include any eligible assets used or installed ready for use by 30 June 2018;
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IMPACT: small business will be able to receive immediate write-offs.
I am aged 65 or over and may want to downsize my home:
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It is proposed that where a person sells their principal residence, they will be able to make a non-concessional contribution to their super fund of up to $300,000 from the sale proceeds. These contributions will be exempt from the current work test for superannuation contributions. Interestingly, the Budget papers also state that these contributions will be in addition to those permitted under existing rules and caps - including the $1.6M balance test for making concessional contributions;
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To be eligible, the principal residence must have been owned for the past 10 years;
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This right will extend to both members of a couple for the same home;
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The proposed date of effect is 1 July 2018;
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IMPACT: This measure will assist older people to contribute to superannuation when downsizing their home.
I lost the age pension due to the 1 January 2017 asset test changes:
I am saving for my first home:
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It is proposed that you will be able to direct your savings for your deposit to your super fund. You will be entitled to contribute up to $15,000 per annum (and $30,000 in total). These limits are to be part of your existing caps. Concessional contributions and the deemed earnings on them, will be able to be withdrawn from your super fund and will be taxed at your marginal rate less 30%. Where a couple is purchasing a home together, they are each entitled to take advantage of this measure.
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The proposed effective date for making the contributions is 1 July 2017, and the proposed effective date for withdrawing these contributions is 1 July 2018;
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IMPACT: first home buyers should seek financial advice to determine whether they should make salary sacrifice contributions to super to fund their deposit in this manner.
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