Tasmania Budget 2018–19 — What property investors need to know
finance-advice
1 minute read

Tasmania Budget 2018–19 — What property investors need to know

Tasmania Budget 2018–19 — What property investors need to know

by Sasha Karen | June 14, 2018 | 1 minute read

The Tasmanian budget has been handed down and there are a few things that investors should keep an eye out for that could raise their portfolio's value, as well as assist potential first-time investors and target foreign investors.

Hobart
June 14, 2018

Delivered on Thursday, the Tasmanian budget for the 2018–19 financial year has some bits and pieces that could help improve the profitability of an investor's portfolio due to an improving economy, but nothing that directly targets existing local investors.

First-time investors and foreign investors, on the other hand, saw some changes that could impact how they operate in Tasmania:

First home owners’ grant

The First Home Owner Grant grants first home owners in Tasmania $20,000 for newly constructed homes. Those who have homes newly constructed and owner builders will see the grant eligibility being extended from 1 July 2018 to 30 June 2019 inclusive.

While this has no real use for existing investors in Tasmania, for those who want to start investing in the Tasmanian market, this could be an avenue to start rentvesting. However, first-time investors must consider that they have to live in the property themselves, which would be a period of time that no rent is collected.

Foreign investors

Foreign investors will be faced with a Foreign Investor Duty Surcharge, which sees an additional 3 per cent of the dutiable value for all purchases by foreign residents and an additional half per cent of the dutiable value for all purchases of primary production land by foreign investors.

The budget measures that could indirectly assist investors by boosting the economy, and therefore boosting the value of their portfolio are:

Infrastructure

In financial year 2018–19, the Tasmanian government plans to spend $888.2 million on infrastructure, which includes:

  • $73.8 million to the Roads Program;
  • $121 million to the BridgewaterBridgewater, TAS Bridgewater, SA Bridge
  • $100 million to the Affordable Housing Strategy II;
  • $96.1 million to new school construction
  • $70.5 million to upgrading hospital infrastructure;
  • $30.8 million to new ambulance service infrastructure;
  • $51 million to the Cradle Mountain Experience; and
  • $45 million to a new Northern Prison.

Economy and job growth

In financial year 2018–19, the Tasmanian government plans to spend $70.8 million on the economy and job growth, which includes:

  • $16 million to upgrading visitor infrastructure across Tasmania;
  • $15.5 million to develop TasTAFE infrastructure, which includes:
  • $7 million to a Trades and Water Centre of Excellence.
  • $12 million to upgrade tourism marketing
  • $7.5 million to help small businesses employ more apprentices and trainees;
  • $7 million to modernize agricultural research farms;
  • $6.8 million to implement the government’s Taking Hospitality to the Next Level policy;
  • $4 million to implement an Event Attraction fund;
  • $2 million to implement the Screen Innovation fund; and
  • Introduce multiple new tax reform initiatives, which include:
    • A regional business relocation payroll tax exemption;
    • A new lower payroll tax rate and threshold; and
    • The extension of the payroll tax rebate scheme for apprentices and trainees in skill shortage areas.

Health and education

In financial year 2018–19, the Tasmanian government plans to spend $438.8 million on the health and education, which includes:

  • $202.3 million to supporting Acute Hospital Services;
  • $90.2 million to support ambulance services;
  • $46 million to support children;
  • $40.2 million to support Statewide and Mental Health Services;
  • $40 million to meet Tasmania’s contribution to the first four years of operation of the Commonwealth Redress Scheme; and
  • $20.1 million to continue the Safe Homes, Safe Families policy.
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