The much-anticipated tax cuts were implemented on July 1, 2024, with the lowest tax rate dropping from 19% to 16%. A welcomed boost in take-home pay for every Australian taxpayer. And for those who are self-employed, we have factored in these cuts in your quarterly and yearly estimates, ensuring you can enjoy the extra savings. If you need a comprehensive consultation, reach out to our financial planners and tax accountants in Geelong.
New Tax Updates & Strategies Explained
Tax Reductions
These cuts will lower the 32.5% marginal tax rate to 30%, creating a single tax bracket for incomes between $45,000 and $135,000. Contact our tax accountants in Geelong at HJC for personalised advice and precise calculations.
Starting 1 July this year, the government has:
- Reduced the 19% tax rate to 16%
- Reduced the 32.5% tax rate to 30%
- Raised the threshold for the 37% tax rate from $120,000 to $135,000
- Raised the threshold for the 45% tax rate from $180,000 to $190,000
These changes mean that all 13.6 million Australian taxpayers will receive a tax cut from 2024–25 onwards. For example, an individual earning an average wage of around $73,000 will see a tax reduction of $1,504.
Taxes On Property
Negative gearing and other taxes on investment properties remain unchanged, and the general 50% discount for Capital Gains Tax remains unchanged.
First Home Buyers
The Labour government has also introduced an equity contribution scheme to assist first-time home buyers. Eligible buyers will need a minimum deposit of 2%, with the Federal Government contributing up to 40% of the purchase price for new homes and up to 30% for existing homes.
To discuss if this strategy is right for you, please contact HJC to discuss your options.
More Cost Of Living Relief
Australians face financial pressure, and the government’s top priority is providing cost-of-living relief. The tax changes are designed to offer meaningful relief without adding to inflationary pressures. These cuts complement other targeted cost-of-living measures, including energy bill relief, cheaper medicines, strengthening Medicare, higher income support payments, and the most significant increase to Commonwealth Rent Assistance in over 30 years.
Nearly 1 million households are set to benefit from a slightly higher rate of Commonwealth rent assistance, with the maximum rate increasing by 10%. This signifies a targeted effort to enhance support for renters facing housing cost challenges and is part of broader measures to improve Australians’ overall cost of living.
Additional changes include higher rent assistance rates, a capped co-payment for medicines, and access to higher jobseeker payments for those with a partial capacity to work. The budget package extends beyond immediate financial relief, encompassing freezes on social security deeming rates, indexation caps on HECS debts, and other provisions to enhance economic stability and support for various segments of society.
Mastering Your Finances With Insights & Guidance
Let’s discover how to optimise your financial decisions and secure your future with professional support from our HJC tax agents in Geelong.
Personal Tax Assistance
As one of the expert accounting firms in Geelong, we still have appointments for those who prefer in-person consultations. For added convenience, our online filing option offers swift turnarounds in a user-friendly format. Our HJC tax agents in Geelong benefit from extended deadlines. Even if there are concerns about potential tax liabilities this year, any payments will not be due until March 2025, irrespective of when you file your return. This extension offers you more time to strategise and manage your finances effectively.
Rental Property Finances
Recent trends indicate that interest rates remain stable without projected rate cuts until after 2025. Over the past two years, there has been a noticeable surge in holding costs for landlords, particularly in Victoria. This increase is influencing decisions on whether to maintain or sell investments. Various options are available to alleviate some of this financial pressure, such as lenders offering improved rates by leveraging your home as security or extending finance terms to reduce repayment levels. Feel free to reach out if you would like guidance on whether these options align with your circumstances and what you need to consider for your financial planning.
Tailored Advice From Personal Tax & Small Business Accountant in Geelong.
For more personalised advice and comprehensive support in navigating these financial matters, consider consulting HJC’s financial planning firm. We are here to assist you and bring you peace of mind in managing your finances effectively.
