I’m sending you my warmest holiday wishes and hope you have a restful and joy-filled time with your loved ones. As 2017 comes to a close, it is the season and time to look back at the key issues of the year.
On 9 May, Federal Treasurer Scott Morrison MP, delivered his second Federal Budget. With some considerable focus on affordable housing, there have been impacts on personal income taxation, superannuation and social security entitlements for most clients.
From 1 July 2017, deductions for travel expenses related to inspecting, maintaining or collecting rent for a residential rental property will be disallowed. Plant and equipment depreciation deductions are also limited to outlays actually incurred by investors in residential real estate properties. The acquisition of existing plant and equipment assets, on the other hand, will be included in the cost base for CGT purposes.
Subsequent owners are still entitled to claim qualifying capital works deductions based on the property structure and assets permanently fixed to the building. You can read more about the 2017 Federal Budget and depreciation changes here
Clients have also benefited from valuable superannuation tips. From 1 July 2017 individuals will be able to make voluntary contributions to superannuation of up to $15,000 per year and $30,000 in total, to be withdrawn for the purpose of purchasing a first home. Both voluntary concessional and non-concessional contributions will qualify.
Concessional superannuation contributions are tax deductions with a tax of 15%. People who are 49 years old and above can claim up to $35,000 of tax deductions while those who are below 49 years of age can claim $30,000. If you want to know more about superannuation changes and tips, click here
This year, new legislation in NSW, Victoria and Queensland will result in land tax surcharges for all non-fixed trusts owning properties in those States unless a specific amendment to the trust deed is undertaken. A fixed or Unit trust may be liable to the land tax surcharges where a “foreign person” is a unit holder of the trust. This can include where a discretionary or non-fixed trust holds units in the fixed trust. What can you do? Know more here
I would also like to look back at some of the articles that our readers seem to have enjoyed the most. Many of our readers seem to be concerned about the Melbourne property market. The Melbourne market may get tough but it may not get as bad as some predict. Property price drops are forecast in Melbourne in 2017 because of car manufacturing job losses and overbuilding of houses and apartments.
A true collapse however could be caused by a high unemployment rate that will trigger many forced home sales. A credit squeeze may also cause our property markets to collapse but a crash may not happen anytime soon. Read our article here if you want to know reasons why a crash in the near future is unlikely.
This coming 2018, remember to avoid common lines of credits mistakes as well. Many people use line of credit like a business uses an overdraft and you only pay interest on the debt that’s outstanding at a point in time. The problem is when you just change the “purpose” of your loan. You need to be very careful with this as it’s an easy trap to fall into. You can read more lines of credits mistakes to avoid here
Finally, one of our most read articles is about the difference between a franked dividend and an unfranked one. Note that Franked Dividend increases the return substantially. If it’s a Franked Dividend, it will include a credit of 30% which represents the tax that has already been paid by the company. To read more about Franked Dividend vs. Unfranked Dividend, please click here
If you want to see other news that made it to the Chan & Naylor headlines this year, you can visit the 2017 blog section here
On behalf of the Chan & Naylor team, I would like to reach out and thank you for our partnership. It has been an honour for us to serve you. I am proud of our team of dedicated professionals, who work to meet your needs. I appreciate the opportunities you have provided to Chan & Naylor, your confidence in us and most importantly, the efforts in making Chan & Naylor a better company. We look forward to an even better 2018.
All the best this holiday season,