Tax deductions will flow to SMEs and minimum wage earners will have more money in their pocket, but family benefits have been cut under a raft of changes that came into force on 1 July.
Here are the key changes that are now in place affecting people running or working for SMEs and families.
Business tax breaks
A cut in the tax rate to 27.5% for small businesses extends to firms with turnover of up to $10 million.
Instant tax writeoffs for equipment purchases worth up to $20,000 extended for another year.
New businesses can make immediate tax deductions for professional services such as legal and accounting advice instead of writing them off over five years.
$70 million is available from the federal government to allow farmers to claim tax deductions for depreciation in the value of water and feed storage facilities as well as fencing.
Personal income tax cuts
The upper limit for the middle income tax bracket lifts from $80,000 to $87,000, meaning half a million workers won’t be tipped into the 37% second-top marginal tax rate.
The changes, which will save workers up to $315 a year, were announced in the May budget but legislation is yet to pass parliament.
Minimum wage rise
Australia’s lowest paid workers will receive an extra $15.80 a week after the Fair Work Commission lifted the minimum wage by 2.4%.
The super co-contribution income threshold rises from $35,454 to $36,021. The government will hand over up to $500 for those earning less than $36,021 and who top up their super by up to $1000.
People with self-managed super funds can no longer store collectibles such as jewellery and art at a SMSF trustee’s home. They must also be insured in the name of your super fund.
Family Tax Benefit B scrapped for couples when their youngest child turns 13.
The Large Family Supplement also goes, while the time limit for receiving Family Tax Benefit B, child care payments and double orphan pensions while travelling overseas falls to six weeks from 56 weeks.
A 10% withholding tax will have to be paid by people buying Australian properties worth more than $2 million sold to them by foreign residents.
Australian residents selling properties of the same value will have to apply for a clearance certificate proving they are not a foreign resident so they don’t have to pay the tax.