Saturday 15 September 2018

Your Federal Budget 2018

At a glance, the 2018 Federal Budget seems like it will have little direct impact on commercial real estate. With this said, given the predicted impacts on business overall, the industry will more than likely be impacted in some way or another. The tax cuts will mean people will have more disposable income to spend which will help the retail sector which is struggling at this present time. As commented by a colleague this morning, the budget has resulted in small savings for many.

Developers

Developers who have vacant land for the purpose of future residential development will be affected by a cut back on tax incentives from 1 July 2019. This will particularly hurt those developers who are not necessarily land banking, but have applications in with Council and are experiencing long process delays. Developers will not be able to claim expenses such as council rates and maintenance costs whilst the land is vacant and not being rented out or used for business.  The initiative does NOT apply to land owned to carry out a business, including primary production. Businesses can start to claim expenses after land is built on, the property has received approval to be occupied and is available to rent.

Pensioners

The Pension Loan Scheme has been opened to all older Australians and it will allow pensioners to borrow against the value of their home and other assets without selling up, encouraging older homeowners to hang on to their properties and invest in other options including commercial real estate. The Pension Work Bonus has also been expanded to allow pensioners to earn an extra $1,300 a year. Employers will also be offered wage subsidies for up to $10,000 if they take on an older worker.

Unlocking Commonwealth Land

The Redland City area in Queensland will free up land for the development of around 100 homes and around 400 homes are targeted for the metro Brisbane area, creating more jobs, more local business to support these local developments and more commercial business and investment opportunities.

Transport

Over $1 billion to be put towards clearing congestion on the M1 Pacific Motorway and the Bruce Highway with a positive impact on reducing delivery times and outlays for businesses.

Unemployment

Approximately $250 million will go towards creating more apprenticeships and traineeships and $89 million towards creating more than 40,000 transition to workplaces to support youth aged 15-20 years of age. This will provide an opportunities for small businesses to expand.

Small business

The small business asset tax write off initiative to be extended for another 12 months until 30 June 2019. This affects small businesses with a turnover of less than $10 million and will be extended to purchases up to $20,000.  Additional protection provided to business through the extension of unfair contract terms protection. The new Australian Financial Complaints Authority is giving more small business access to free, fast and binding dispute resolution, particularly assisting small businesses in chasing those trying to avoid paying bills.

Superannuation

There will be a ban on superannuation exit fees when people change funds.

Foreign Companies

The tax treatment of stapled structures has been amended removing the loophole that gave foreign companies greater tax breaks over Australian companies. The thin cap rules have also been tightened to stop multinationals from fiddling with debt to reduce their tax liabilities.

Digital Business

A discussion paper to come that will explore options for taxing digital business in Australia.

Black Economy Taskforce

Will bring in $5.3 billion over the next 4 years by targeting sectors that under report income.

Your Property | Your Agent - Your Commercial

 

We have a number of off market properties we would be delighted to talk to you about. For further information please call us on 07 3148 9901 or email us at info@yourcommercial.com.au