Earlier this month, the Federal Government handed down the 2020/2021 budget, which outlined a range of measures designed to get the economy moving again post-COVID-19. Amongst those measures announced were new write-offs for businesses and an additional 10,000 places in the First Home Loan Deposit Scheme, good news for many Australians. Below are some of the key measures of the 20-21 budget and what these might mean for you.
Tax cuts For taxpayers
More Australians will have help with their household budgets as Government is bringing forward its second stage of tax cuts and is planning to backdate the tax cuts to July this year. The flow-on effect of tax cuts is likely to benefit the wider economy.
Support for housing construction
An additional 10,000 first home buyers will have access to the First Home Loan Deposit Scheme as an extension to the scheme was announced. Under the scheme, first home buyers can access lending to buy a new home or a newly built home with a deposit of as little as 5 per cent, with Government guaranteeing up to 15 per cent of a loan.
Furthermore, an extra $1 billion in low cost finance will be available for the construction of affordable housing, and another $150 million will be made available to construct new homes in regional areas as part of the Indigenous Home Ownership Program.
Investment in infrastructure
Government has committed to investing an additional $14 billion in new and accelerated infrastructure projects, supporting a further 40,000 jobs during their construction.
Support for business and investment
A temporary tax incentive is being made available to around 3.5 million businesses. From 6 October 2020 until 30 June 2022, businesses with a turnover of up to $5 billion will be able to deduct the full cost of eligible depreciable assets of any value in the year they are installed, as well as the cost of improvements to existing eligible depreciable assets.
Furthermore, companies may offset losses against previous profits on which tax has been paid, to generate a refund.
Accelerated digital technologies
COVID-19 has meant more of us are online – either for online learning or work. With Government’s Digital Business Plan, an additional $4.5 billion investment will bring ultra-fast broadband to millions of homes and businesses, and further funding will accelerate the rollout of 5G.
Furthermore, Government’s Cyber Security Strategy will support keeping us safe online by strengthening AFP’s capacity in an increasingly complex environment.
Make doing business easier
Regulatory processes will be streamlined and digitized to make doing business easier, and small businesses will be supported with reduced regulation which will help reduce unnecessary business costs.
Winners and Losers
These are just a few of Government’s budget measures for 2020 – 2021. You can read the full Budget Overview here. As with every budget, there are both winners and losers. Despite a staggering budget deficit of $213 billion for FY2020-21, there is still good news for many Australians in the Budget.
If you have questions about the first home buyer schemes that you may be eligible for, get in touch with our team of mortgage brokers. We’re experienced at cutting through the jargon and can help simplify the application process and walk you through the home buying process from start to finish.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.
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