As business finance brokers in Rockingham, we try to stay on top of anything that may affect your business. We try to stay out of the politics and just look at things one way: how will they affect our customers and their ability to obtain satisfactory terms and rates on their loans?
The 2016 budget was announced on 3 May. Two changes may be important to those who are trying to get started as property investors but the most important “change” may be the one that didn’t happen. Here are the three most important revelations from the new budget.
Lower Taxes for Small Businesses and Some Middle Income Earners
The tax rate for businesses that turn over less than $10 million a year has been reduced from 28.5% to 27.5%. In addition, middle income earners will find some relief as the second highest tax bracket has been moved up to $87,000 instead of $80,000.
The business tax cut will result in more profit and more capital for most businesses. The movement of the tax threshold will result in those who make between $80,000 and $87,000 having more money to invest in a rental property.
Superannuation changes will affect those on the top and the bottom of the scale but won’t affect most Australians. The government is introducing a superannuation tax offset for low income earners starting 1 July 2017. Meanwhile, those who are wealthy won’t be getting the generous breaks they have been getting on their supers.
The Biggest Non-Change
The biggest news, though, was for investment properties, as no changes to negative gearing were announced. In other words, property investors will still be able to reap the tax benefits of negative gearing on investment properties.
Negative gearing means that the amount of money being spent on interest and the costs of managing and maintaining an investment property is more than the rent being collected on that property. Investors/landlords are allowed to subtract their loss or negative gearing from their taxable income.
Call a Business Finance Broker at Smartline Rockingham
To learn more, call us today: (08) 9527 1800.