Budget Highlights 2017

1. Negative gearing
From 1 July 2017, the government will disallow deductions for travel expenses. For properties bought from May 10 2017, plant and equipment depreciation deductions can only be claimed when it is directly incurred by investors.

2. Small business instant asset write-off scheme
Businesses with turnover not more than $10 million can choose to immediately write off expenditure up to $20,000. This scheme is set to continue until June 30, 2018 (originally until June 30, 2017).

3. Changes in tax thresholds

The government has increased the threshold at which the 37 per cent tax rate begins from $80,000 to $87,000, and the abolishment of 2 per cent deficit levy for high income earners effective 1 July 2017. This means that the top marginal tax rate which applies at $180,000 will decrease from 47 per cent to 45 per cent (not including Medicare levy).

4. Medicare levy
From 1 July 2019, the Medicare levy will be increased from 2.0% to 2.5% of taxable income.

5. Corporate tax rate
The government has confirmed its intention to reduce corporate tax rate to 25 per cent for all businesses. The corporate tax rate will reduce to 27.5% in 2017-18 financial year from 28.5% this current financial year 2016-17.

6. Self-employed super contributions
The eligibility rule of 10 per cent employment income does not apply after 1 July 2017, which means employers can claim more tax deductible superannuation contributions starting 2017-18 tax year.

7. First home super scheme
First-home buyers will have the opportunity to salary-sacrifice contributions for a home deposit from pre-tax salary into the First Home Super Savers Scheme, using their existing superannuation account with the same tax advantages of superannuation. Contributions will be limited to $30,000 per person and $15,000 per year.

Happy Year End everyone!!!

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