The budget loopholes
I always laugh at budget time as Australia halts whilst waiting for the proposal, which is then usually blocked by the opposition. Making it almost a waste of time unless they bribe the independents to vote for the bill. Forgive me if I come across as cynical, but it’s pathetic!
So lets look at what’s been proposed on the property front and how little thought these plans have had put into them.
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First home owners can put away pre tax savings now of $30,000. Now on the surface, this idea looks OK for those who could save the extra dollars per week. But on the flip side, university fees have just increased, which must also start being repaid when incomes reach $42,000. So if they manage to save a deposit, they cant’ service a loan from the banks due to increased living expenses.
Plant and equipment deductions will no longer pass through to the next owner as previously allowed. Unless the new owner has purchased them for their property. Smart investors will now purchase the plant items separately to the property as second hand items from the vendors. Honestly, didn’t anyone put any thought into this?
Foreign owners will be slugged $5,000 per annum if their property is not made available for lease for at least six months of the year. Given that most of the foreign owners own high rise units where there is a huge oversupply, all they need to do is advertise their property for lease at market value to avoid this.
The big four banks are to pay a new levy. I’m almost in tears. So instead of increasing taxes, they put a levy on the banks, who will simply pass on the levy to their customers.
In what I think is the only good property proposal put forward this budget, downsizers can put up to $300,000 each into their super from the sale of their home, once retired. That’s a game changer!
And Bill Shorten’s no better with his plan to abolish negative gearing except on new dwellings in an attempt to make housing more affordable. Now Bill let me get this straight. You want to shift every investor to buy new properties, which is where first home buyers receive free stamp duty. So by increasing buyer competition for FHBs, this will make the property more affordable? Am I missing something here?
Want to make housing more affordable? Attract large companies to relocate to regional areas through tax incentives. Allowing people to relocate with employment opportunities, just like they do in the USA.
And lastly, like I’ve I said before, Scott Morrison, my office is literally one floor above yours. I’ve always got a cold beer in the fridge should you want to have a chat!
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