Recent Tax Updates
We continue to see tax changes, some may not be new to you as it is likely we have already raised an awareness at the time the changes are proposed but some changes do come as a surprise! We try to keep you in the loop where the tax changes are relevant.
Tax changes recently enacted
Alternative home office calculation— For the 2018 financial year, when a private residence is available for business use, a $/square metre rate is available rather than determining the actual expenditure and taking the appropriate portion as a deduction. The rate for the 2018 year is $41.10 which is based on the average cost of utilities per square metre of housing but excludes interest mortgage and rates or rent, those still need to be calculated as per the apportionment method.
Extension to the bright-line test — From 29 March 2018 the bright-line test for residential property has been extended from 2 years to 5 years. The extension of the test applies to properties for which an agreement to purchase was entered into on or after the application date and the test is applied in the same way as it was previously – so the same criteria still applies and the same exclusions are still applicable.
If you think a bright-line tax may apply to you talk to us early so we can consider the tax implications (if any) before you sell your property.
Student loan changes — From 1 April 2018 the interest for student loan borrowers decreases from 4.4% to 4.3% and the annual repayment threshold increases from $19,136 to 19,448.
The Families Package — From 1 July 2018 the Families Package changes come into effect. These include the Best Start credit (a new weekly payment of $60 per child for up to 3 years and available to eligible parents); changes to the paid parental leave (extends leave from 18 weeks to 22 weeks for eligible parents); and changes to the Working For Families tax credits (increased payment rates and widens the eligible income ranges).
Payday filing for employers — Voluntary from April 2018 but compulsory from April 2019. It requires employers to report their employees (including contractors and Withholding Tax deductions) income and deductions each payday rather than on the current monthly basis. Payment dates of PAYE and other payroll taxes at this stage remain as payable on the 20th of the month following.