Budget - May 2010 - What Does it Mean for Us?
There were a couple of surprise changes in the Budget announced on Thursday, even though a
number of changes had been widely tipped prior to the announcement.
The two biggest surprises were tax relief for middle income earners and the lowering of the
Company tax rate from 30 cents to 28 cents, these were widely kept secrets.
On the other hand property investors took a bit of a hammering, but at this stage not as bad
as had been widely predicted.
So what does all mean for us?
Income Tax Changes for Individuals
As expected, the Budget cut the top and bottom income tax rates for individuals, but delivered larger
than expected benefits for middle income earners. Previously, personal tax rates were hinted at falling
from 38cents, 33 cents, 21cents and 12.5 cents to 33 cents, 19 cents and 10 cents. In reality they
fell as follows << Read more
GST to Increase
Tempering the tax reductions above, will be the fact that GST increases from 12.5% to 15.00%.
This increase will take effect also on the 1 October 2010. So with the GST increase and the tax deductions,what
does that mean for us, the following table gives a brief overview << Read more
Company Tax Rate Change
From the 1 April 2011, the Company tax rate will reduce from 30 cents down to 28 cents. For once, this puts
us ahead of Australia, who plan to reduce their Company tax rate to 28 cents but phased in over 3 years
commencing from 2012 / 2013 << Read more
Depreciation - On Buildings... Goes / New Plant & Equipment... Reduced
Depreciation deductions will no longer be allowed for buildings with an estimated useful life of over
50 years or more. This applies directly to rental houses and the commercial sector. From a conceptual
view, this is one scenario that is hard to agree with, as we all know that properties that are tenanted do
depreciate, while the land they sit on appreciates << Read more
Loss Attributing Qualifying Companies (LAQCs)
The comment made in the budget was “Many investors hold property through LAQCs. After a short
period of consultation, legislation will be proposed so that from 1 April 2011 all LAQCs will be taxed as
limited partnerships”. Prior to the Budget there was some speculation << Read more
Working for Families Adjustment
From the 1 April 2011, the value of assets held in Trusts will be countered as part of the household’s
income when calculating
<< Read moreClick here to view a printable copy of this newsletter.
