The 2020 budget was delivered on October 6th, and as to be expected given the covid19 pandemic, its a big budget designed to stimulate spending and help kick start the Australian economy. Here are the key takeaways from the budget for the Property Sector:
Spending on infrastructure is set to increase with $14 billion for new projects to deliver safe roads and to stimulate job creation. In NSW, $2.7 billion has been allocated for road and rail projects where development is relevant and needed.
Tax cuts originally intended to be implemented in 2022 have been brought forward to stimulate consumer spending, so almost 12 million Australians will receive a tax break in the next financial year. However, some of the cuts are temporary and benefit high income earners. Tax brackets have also changed; with the 19% tax threshold increasing from $41,000 to $45,000. Here is a summary of how tax brackets will work for you from Yahoo Finance:
If you earn up to $40,000, you’ll save up to $1,060
If you earn more than $40,000, up to $80,000, you’ll save up to $$2,160
If you earn more than $80,000, up to $100,000, you’ll save up to $2,445
If you earn more than $100,000, up to $120,000, you’ll save up to $2,745
If you earn more than $120,000, up to $200,000, you’ll save up to $2,565
Small businesses are being allowed more tax concessions as the turnover threshold for eligibility to the concessions is being raised from $10 million to $50 million. Eligible businesses will be able to deduct certain expenses like legal, professional or accounting advice when starting up their small business. However, the consensus is largely the budget overall benefited big business, with many commenting that small business missed out in some key areas.
There were some areas in which small businesses stand to benefit; the budget won praise among SME advocates for the focus on tax incentives, wage subsidies and mental health support. It was also noted that personal income tax cuts will flow directly to self-employed people and small businesses, allowing more money to be put back into the economy. Rebuilding business confidence was a focus of the budget with spending and tax measures as well as dedicated mental health support for small business owners.
First Home Buyers
More first home buyers will be able to access a loan to build or buy a newly built home. The government has allowed for an extra 10,000 homebuyers, who will be able to buy with a deposit as low as 5 per cent. The cap on these homes has also been increased from $750,000 to $950,000.