It’s that time of the year again, Federal Budget time, and after last year’s ‘Super Budget’ leading to some significant changes to superannuation and taxation, it’s important to consider what this year will bring for us as Australians.
Last year’s Budget saw the Lifetime Allowance of $1.6M introduced for super funds, as well as reductions in both the concessional and non-concessional contribution caps. Both have had significant impacts on many residents and expats alike with their retirement planning. With just two months left in the financial year, it’s important to consider how these changes may impact you.
Let’s take a look at the key areas that will likely be addressed in this year’s Budget.
It’s likely that the new Higher Education Package will result in University students paying higher fees and the Australian Government contributing less to their studies. The HELP student loan programs will likely remain intact with the income threshold at which repayments commence being reduced to $42,000. This will impact both Australian residents and expats with the new rules ensuring that expats fall under the same repayment rules.
It’s unlikely that negative gearing will be tampered with, however we may see some changes to the capital gains tax exemption rules. Currently, if you hold an asset for beyond 12 months in Australia as a tax resident, you can be entitled to a 50% exemption. To discourage property spruikers and encourage more long-term investors to provide rental accommodation, this tax exemption rate may be reduced or tinkered with to some extent.
Secondly, we may see some form of tax concession that encourages retirees to downside their home and contribute the excess funds to superannuation. This places less pressure on the Government through the form of social security payments and encourages retirees to be more financially independent.
As property investors continue to be in the spotlight with the media, we may see some cap to investment property deductions. It’s unclear exactly how this would work or how beneficial such a strategy would be, but it is certainly one area we’re watching.
There may also be further restrictions placed upon on work-related tax deductions. There are currently a wide range of work-related deductions available in Australia, particularly when compared to those available in Singapore, so we may see these reduced in quantum, which would boost Government revenue.
To find out exactly how this year’s Federal Budget will impact you as an Australian expat, register your place for our exclusive workshop on Wednesday 17th May by clicking here.
To your financial success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group, division of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to international and local professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
Australian Expatriate Group is licensed by Global Financial Consultants in Singapore, with a team of Australian-trained, experienced and qualified, allowing us to provide specialist advice to Australians living abroad.
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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you. We expressly disclaim all and any liability to any person or organisation, in respect of anything, and of the consequences of anything done or omitted to be done by any such person in reliance, whether whole or in part, upon the whole or any part of the contents of this.