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Restrictions on deductions for residential property investments

From 1 July 2017, depreciation deductions for residential plant and equipment (e.g. dishwashers and ceiling fans) will be limited to investors who actually incur the outlay – not subsequent owners. Grandfathering provisions will apply from budget night though for anyone already claiming depreciation calculated under a quantity surveyor’s report. Also from that date, investors will be unable to deduct travel expenses related to inspecting, maintaining or collecting rent for a residential rental property.


Extension of the deductibility threshold for small businesses

The government will extend the existing accelerated depreciation allowance for small businesses by 12 months to 30 June 2018. If your small business has aggregated annual turnover below $2 million (or $10 million if the legislation passes to increase the threshold), you’ll be able to immediately deduct the purchase of eligible assets costing less than $20,000 where they are first used or installed ready for use by 30 June 2018. After that date, the immediate deductibility threshold will revert back to $1,000. The tricky issue with this is that the end date for this measure is currently 30 June 2017 and we won’t know for some time whether the extended date will actually be approved!


New thresholds for HELP debt repayments

From 1 July 2018, income thresholds for the repayment of HELP debts will be revised, along with repayment rates and the indexation of repayment thresholds. A new minimum threshold of $42,000 will apply, with a 1% repayment rate. A maximum threshold of $119,882 will apply, with a 10% repayment rate. Currently, the maximum repayment threshold for the 2017–18 financial year is $103,766 with a repayment rate of 8%.


Additional non-concessional cap for retiree downsizers

From 1 July 2018, people aged 65+ will be able to contribute up to $300,000 into super from the sale of their principal home, if they’ve owned their home for at least 10 years. The existing restrictions for contributions over age 65 won’t apply for these non-concessional contributions. However, if you or your partner receives the age pension, this could cause your entitlements to be reduced as the funds will still count towards your assets test.