From 1 July 2017, the Government is changing some of the items claimable by investors. One of the big changes is that the Government will no longer allow investors to claim deductions for travel expenses related to their investment property. The Government explains that this is being established to reduce the abuse of these deductions.
Another one of the changes is confining the depreciation deduction of plant and equipment that could easily be removed from the property, and only allowing the expenses actually incurred by the investor. So items like dishwashers, and other removable items, will be impacted by this change.
Another change that is being introduced, is the introduction of withdrawal from superannuation for the purpose of purchasing a first home. From 1 July 2017, Australians can contribute up to $15,000 per year in voluntary superannuation contributions, up to $30,000 in total that can be withdrawn from their superannuation fund and used for a first home deposit.
These withdrawals will be permitted from 1 July 2018, and couples will be able to combine their savings to produce a single deposit. The benefit to this introduction for first home buyers is that these contributions and earnings will only be taxed at 15%, rather than marginal tax rates, and the withdrawals will be taxed at marginal rates, less a 30% offset.
Older Australians will be given the opportunity to sell their larger homes and downsize with the ability to contribute up to $300,000 from the sale proceeds of their home into superannuation as a non-concessional contribution.
As always, speak with your financial advisor before making and financial decisions