From 1 July 2017 depreciation deductions on removable assets (such as plant and equipment) will be abolished for purchasers of residential property. Also, purchasers of plant and equipment will only be eligible to claim a deduction over the effective life of the asset after 9 May 2017.
Additionally, any deductions for travel expenditure such as expenses incurred for inspecting, maintaining and collecting rent for residential investment properties will also be abolished.
First home buyers
Tax payers can now make voluntary contributions into their superannuation from 1 July 2017 of up to $15,000.00 per year and $30,000.00 in total. This may be withdrawn by first home buyers to contribute towards a deposit for purchase of a property.
The NSW Government has also announced measures to support first home buyers to commence 1 July 2017, including:
- Abolishing stamp duty on all homes up to $650,000;
- Reducing stamp duty for all homes between $650,000 and $800,000;
- Providing a $10,000 grant for builders of new homes up to $750,000 and purchasers of new homes up to $600,000;
- Abolishing insurance duty on lenders mortgage insurance; and
- Removing the entitlement to defer payment of stamp duty for 12 months on off the plan purchases by investors.
Downsizing for over 65’s
Individuals aged 65 years and older will be given an incentive to downsize by making a non-concessional contribution of up to $300,000 per individual into their superannuation account from the proceeds of selling their principal place of residence.
This will not have an effect on the individuals’ age test, work test and superannuation balance test for making non-concessional contributions.
Foreign investors will have a $5,000 levy imposed for property that is left vacant for at least six months of the year. Capital Gains Tax payable on property sales will be increased by 2.5%.
Developers of new developments with 50 or more units will now be prevented from selling 50% or more of its property to foreign investors.