News for Property Investors Seniors and Public Housing

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In the Governments latest Federal Budget, High Income Earners will be happy but the news wasn’t so good for Seniors, First Home Buyers, and those needing Public Housing

Property Investors

There were no negative gearing cut’s in the latest Federal Budget which is very good news for the Property Investors.

Homeowners planning to sell their principal place of residence won’t have to pay capital gains tax (CGT) which is good.

At the moment, if an investor sells an investment property, CGT is calculated, but the family home is the only property exempt from this tax and will hopefully remain so in the future.

So with interest rates likely to remain low and with inflation forecast to hold steady at 2.5% for the next couple years investors can be confident.

Investors keen to use a Self-Managed Super Fund (SMSF) down the track to purchase an investment property might soon have more funds to do so as there will be an immediate increase in the superannuation rate from 9.25% to 9.5% from July 1 this year. It will increase by 0.5% until it reaches 12 per cent in 2022-23.

Public Housing

Unfortunately the National Rental Affordability Scheme (NRAS) property scheme is being discontinuing saving $235.2 million over three years.

The National President of the Urban Development Institute of Australia, Cameron Shephard said that “Since its establishment in 2008, NRAS has delivered 14,575 new homes for low and moderate income households and was on track to provide 23,8884 more,”

The scheme will remain in place for investors who already own NRAS property and funding for properties already tenanted won’t be impacted. However, uncontracted funding from earlier rounds, or contracted funding that hasn’t been used within agreed timeframes, will be returned to consolidated revenue.

Mr Shephard said that NRAS became too bureaucratic and administrative but he believes there would have been other solutions, rather than scrapping the program. “They’ve thrown the baby out with the bath water,” he said.

“We suggested keeping the scheme but make it more efficient and now the Federal Government is walking away from any sort of public housing and we think that’s wrong.”

Senior’s

The government has scrapped Housing Help for Senior’s program. The program was introduced in last year’s budget, to assist seniors who wish to downsize their home. The axed program saves $173.1 million over five years.

Executive Director of the Retirement Living Council Mary Wood says it’s disappointing. “Senior Australians should be allowed to choose homes that allow them to age in place, but the scrapping of the Housing Help for Senior’s creates less housing choice and puts more pressure on residential aged care and the taxpayer,” she says.

The First Owners Saver Accounts, which helped first homebuyers save for their first home, was another scheme scrapped by the government.