The Abbott Government's second budget will benefit many people involved with property, according to experts.
Peter White, FBAA CEO, said that the measures announced will mean that the nation's ability to take out and finance mortgages is still strong.
"Tax breaks for small business will help businesses expand and create jobs while treasurer Joe Hockey’s ‘Jobs for Families’ should help ease the burden of the household budget and relieve pressure on mortgage repayments,” he said.
More good news was the Coalition Government decided to maintain the taxation allowance for negative gearing, said White.
"Thousands of Australians would miss out on the benefits of investment property ownership and with cash rates at an all-time low, the climate remains perfect for property purchasing," he said.
Meanwhile, changes will also be made to Australia’s foreign investment framework. Under the proposed changes, foreign investors will be charged an application fee – on a sliding scale starting at $5,000 – to invest in Australian real estate.
Whilst this has caused some concern for mortgage brokers, who fear that the tougher guidelines will curb lucrative foreign investment deals, Mortgage Choice CEO John Flavell said brokers shouldn’t expect any significant deterioration in their businesses.
“While this application fee may be high enough to deter some foreign investors, we do not believe it is high enough to significantly impact the current level of foreign investment activity within Australia,” he said.
Additionally, Hockey's $5.5 billion Jobs and Small Business package is the biggest small business package announced in Australia's history.
From 1 July this year, small companies with annual turnover of less than $2 million will have their tax lowered from 30% to 28.5%. Unincorporated business will get an annual 5% tax discount up to $1,000. Small businesses will also be able to immediately deduct new assets up to $20,000.
Flavell has praised the announcement, saying it will encourage more small businesses to invest in growth.
“This stream of tax breaks and incentives will help small businesses to grow and flourish. It will give small business owners the opportunity to reinvest in their businesses and take their companies to the next level.”
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