Wondering how the federal budget and changes to tax legislation will impact you? Here’s a rundown.

With the new federal budget just released and the end of financial year fast approaching, it’s a time when most of us are thinking about how we can use tax legislation to our advantage. Take a look at some of the recent tax changes that have been introduced and how they might impact you.

First homebuyers

 The First Home Super Saver Scheme goes into effect on July 1, 2017, meaning people saving to buy their first property will be able to salary sacrifice from their pre-tax income and put voluntary amounts of up to $30,000 into their superannuation funds. From July 1, 2018, that cash can then be withdrawn, along with any accrued interest, and used for a deposit on a house. These contributions will have the same tax benefits as regular super – contributions and earnings will be taxed at 15 percent, while withdrawals will be taxed at 30 percent below the usual individual tax rate.

Over-65 homeowners

 If you’re on the other end of the spectrum and looking to downsize your home, there’s good news for you too. From July 1, 2018, people over the age of 65 will be able to make super contributions of up to $300,000 from the sale of their home, as long as they’ve lived there for at least 10 years. This “downsizer” contribution can also be used by a couple living at the one residence, meaning two people can enjoy the tax benefits of putting those funds into super.

Medicare

As of July 1, 2019, all Australian taxpayers who meet the Medicare levy threshold will pay 2.5% instead of the current rate of 2%. However, the threshold is set to rise as well – singles will need to be earning $21,655, families will increase to $36,541 plus $3,356 for each dependent child, and single seniors and pensioners will increase to $34,244.

There will also be an opportunity to save some cash on medicine, as doctors are being encouraged to prescribe more generic medication. This is a medication that contains the same drug as a brand-name counterpart, but without the added cost. This change is expected to save taxpayers around $1.8 billion.

Small business

There’s good news for small business owners this year, too. The $20,000 instant asset tax write-off, which came into effect in last year’s budget, will continue for another year until June 30, 2018. This write-off will also be claimable by businesses with an annual turnover of up to $10 million, an increase from the previous $2 million.

Property investment

If you’re buying a property for the purposes of investment (rather than to live in), the rules are being tightened. Due to too many people claiming deductions for private travel, property investors will no longer be able to claim tax deductions for travel related to owning or renting an investment property.

Family tax benefit

100,000 families are set to lose access to the family tax benefit next year. From July 2018, families will be part of an income taper test, meaning they will lose 30 cents of their benefit for every dollar they collectively earn over $94,216. It’s projected that these changes will save the government $415.4 million over five years.

Make sure you’re getting the most out of your tax return. Talk to a professional accountant today.