We hope you’ve had a great week so far.
Today we would like to chat to you about the 2021 Federal Budget, and what it means for you.
To help create jobs, business investment and confidence after COVID-19, the Federal Government has just released a big spending 2021-22 Federal Budget!
Based on our analysis, the big winners appear to be:
- The instant tax deduction for buying equipment, cars, computers etc and the loss carry back for companies has been extended for another year.
Low to Middle Income Taxpayers
- They can enjoy another year of the tax offset of up to $1,080 for individuals or $2,160 for dual income/working couples. You get this after you lodge your 2021 tax return.
- Given that economic growth is expected to be 4.25% in 2021/22, unemployment is expected to fall to lower than 5% this year.
- The downsizing rule means that 60 year-olds and older can sell a big home, buy a smaller one and put $300,000 each into super.
- This is fantastic given that it used to only be open to those over 65 year-olds and older.
- They plan to get rid of the “work test” for people aged between 67 to 74 years of age. This means that retirees can put up to $100,000 a year into super over that time.
- Under the First Home Super Scheme,$50,000 will be able to be dragged out of Super for a deposit for a home loan, as opposed to the original $30,000
- However, this only applies to super contributions that the “young saver” has put into their super over and above what their employer has put in.
- This may be the best place to save for a deposit, as super funds have returns around 7% while bank deposits do not even get you 1%.
- The New Home Guarantee scheme means new homebuyers will only have to find a 5% deposit.
- The Family Home Guarantee scheme means single parents will only have to find a 2% deposit to get a loan for a home.
Here are some key areas we’d like to make you aware of:
The 2021 Federal Budget – Changes to the Super Guarantee Contribution
The Super Guarantee is a contribution your employer makes to your super.
From 1 July 2021, the rate is set to increase to 10% and will continue to increase by 0.5% per annum until 2025.
If you’d like to read more about Super Guarantee Contributions, you can visit the ATO website.
If you would like to organise a tax planning meeting, or have any questions about the above, please give us a call on (03) 9762 7344.
We look forward to assisting you!
The Team @ Knox Taxation and Business Advisory