Surfers Paradise 
As July 1 approaches, the property market is buzzing with changes that promise to impact buyers, owners, and investors alike. From tax cuts to new government schemes, these updates are set to influence the landscape in significant ways. Here’s a comprehensive look at what to expect and how to navigate these changes effectively.
1. Boosted Borrowing Capacities Through Tax Cuts
Starting July 1, the much-anticipated stage three tax cuts will come into effect, putting more money into the pockets of taxpayers and subsequently enhancing their borrowing capacities.
The adjustments in tax rates will see reductions across various income brackets:
- For incomes between $18,201 and $45,000, the tax rate drops from 19% to 16%.
- For incomes between $45,001 and $135,000, the rate decreases from 32.5% to 30%.
- Higher income earners will see the threshold for the 37% rate rise from $120,001 to $135,000, with the over $180,000 threshold moving to over $190,000.
These changes mean more take-home pay, which, according to Mortgage Choice broker James Algar, could increase borrowing capacities significantly. For instance, a buyer earning $100,000 annually might see their borrowing power rise by about $25,000.
2. Crackdown on Dodgy Tax Deductions for Property Investors
The Australian Tax Office (ATO) is tightening its scrutiny on property investors’ tax returns, particularly focusing on incorrect interest claims and misreported expenses. The ATO estimates that erroneous claims could be costing the government $1.2 billion annually, with interest misclaims accounting for 42% of this.
Investors need to be meticulous about their deductions:
- Interest claims should only pertain to the original loan amount used for purchasing rental properties.
- Repairs can be claimed immediately, but upgrades and capital items over $300 must be depreciated over time.
3. Extension of the First-Home Guarantee
Good news for first-home buyers: The First Home Guarantee scheme will continue into the 2024-25 financial year. This scheme allows eligible buyers to purchase a home with as little as a 5% deposit without paying lenders mortgage insurance, thanks to a government guarantee covering up to 15% of the property’s value.
Eligibility criteria include:
- Individual income of $125,000 or less, or $200,000 for joint applicants.
- A deposit between 5% and 20%.
4. Energy Bill Rebates Begin
From July 1, every household will receive a $300 energy rebate, automatically applied in quarterly installments on electricity bills throughout the financial year. Businesses will receive a $325 rebate.
While electricity prices rose about 20% in the 2023-24 financial year, the Australian Energy Regulator (AER) anticipates a slight decrease in prices for most residential customers starting July.
5. New Victorian Property Tax for Commercial and Industrial Properties
In Victoria, stamp duty on commercial and industrial properties will be gradually abolished, transitioning to a new Commercial and Industrial Property Tax (CIPT) system. Properties sold after July 1 will be subject to this system, with an annual tax of 1% of the land value kicking in 10 years after the transaction.
Eligible purchases can access government loans to cover stamp duty, and properties will be exempt from stamp duty on future sales.
Navigating the Changes: Professional Guidance and Expert Insights
At Professionals Newlands Real Estate, we understand that these changes present both opportunities and challenges. Our experienced team is here to help you make informed decisions, whether you’re buying your first home, expanding your investment portfolio, or managing your existing properties.
With over 30 years of expertise in the Surfers Paradise and Gold Coast real estate markets, we are well-equipped to provide tailored advice and strategies to maximize your benefits under these new regulations.
Contact us today to learn more about how these updates can work to your advantage and to explore your real estate options in this dynamic market. Let’s navigate the future together!
