What the Election Result Means For You
The return of the coalition government was good news for first home buyers, property investors and retirees. Not surprisingly the Australian Share market responded positively to the surprise result with the market surging to an eleven year high.
This surge in confidence should allow investors to make decisions with greater certainty for the foreseeable future. The key financial points to take away from the election result are -:
- There will be no changes to the current legislation relation to negative gearing or capital gains tax. This is great news for property investors in particular who will now be able to make property investment decisions with confidence.
While the property market is still facing the headwinds of tighter lending criteria and falling buyer confidence, the new certainty surrounding negative gearing in particular will help to give the property market some much needed impetus.
- First Home Buyers may be able to benefit from the new government initiative called the First Home Loan Deposit Scheme. This scheme will allow some First Home Buyers to purchase their first home with a 5% deposit without having to pay for lender’s Mortgage Insurance.
Of course, all loans will still be subject to normal lending criteria but the potential for First Home Buyers to now enter the market earlier than otherwise would have been possible is enhanced. This initiative will help to increase demand for housing and help to shore up property prices.
- There will be no changes to the existing rules surrounding Franking credits and dividend imputation. This is great news for many retirees who were concerned about the opposition’s plans to remove these rules.
- Lower tax rates for individuals earning up to $126000 per annum. Initially there are plans to remove the 37% tax bracket completely. The government is committed to delivering these cuts as soon as possible. While the plan was to implement these cuts by July 1 this year, this may not be logistically possible. However, the government has indicated that the tax cuts will be back dated to that date.
These commitments should help to boost investment and consumer confidence in key areas. If you need assistance with making these initiatives work for you please contact Australian Finance Hub to discuss your circumstances.