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A number of changes announced in the Budget that will have an impact on investors and which were due to take effect from July 1 have not yet been legislated.
The Parliament adjourned at the end of June for its winter recess, with legislation for a number of Budget measures either not passed or not released.
- July 1 was the nominated start date for the First Home Super Saver Scheme but legislation to give effect to this Budget measure has not been released. The scheme allows for $15,000 a year (up to a total of $30,000) to be contributed to super as a concessional contribution and put aside for a first home deposit.
- The use of “plant and equipment” depreciation deductions is being restricted to outlays actually incurred by investors in residential real estate properties. Subsequent owners of a property will be unable to claim deductions for plant and equipment purchased by a previous owner of that property. The nominated start date was July 1.
- Travel expense claims related to inspecting, maintaining or collecting rent for a residential property will no longer be allowed. This measure was due to start on July 1.
- Another measure scheduled to start on July 1 but not yet legislated is an increase in the capital gains tax discount from 50 per cent to 60 per cent for gains relating to investments in qualifying affordable housing. The Government had also planned to have legislation in place by July 1 to facilitate investment in affordable housing by managed investment schemes.
- A plan to require purchasers of newly constructed residential properties to remit GST directly to the Australian Taxation Office was to start on July, but legislation has not been passed.
- The Government will align the GST treatment of digital currency with money. Purchases of digital currency will not be subject to GST. The change was to apply from July 1; legislation for this measure was released on June 29.
- The move to deny foreign and temporary tax residents access to the CGT main residence exemption was not legislated.
Graeme Colley, executive manager SMSF technical at SuperConcepts, says investors should assume that when these measures are legislated they will have a retrospective effect back to July 1 (or other nominated start date).
This is because they apply to the tax year and will have effect for the full financial year, assuming legislation is passed before the end of the financial year
Colley says the number of measures announced in this year’s Budget but not legislated by the date on which they were to take effect is about the same as usual.