The Federal Government budget 2016-2017 Winners and Losers.

Small Business

The Federal Government budget 2016-2017 will back small businesses by reducing their tax rate to 27.5%, the threshold for businesses eligible for this will rise from $2 million in annual turnover to $10 million. This will affect about 870,000 businesses and about 3.4 million workers.

Further the Government will decrease the tax rate for all companies to 25 per cent by 2026-27.

Since many small businesses are not incorporated (companies), the Government will increase the tax discount to 8 per cent on 1 July 2016, up to a maximum value of $1,000 for unincorporated businesses with annual turnover of less than $5 million. After the initial increase, the discount will be increased in phases to a final rate of 16 per cent in 2026-27.

Average full-time earners

The 2016-2017 year budget will prevent average full time wage earners from moving into the second top tax bracket until 2019-20 by increasing the 32.5 per cent tax threshold from $80,000 to $87,000. The government believes this will stop around 500,000 taxpayers facing the 37 per cent marginal tax rate.

Young Job Seekers

The Governments’ new initiative on 2016-2017 year budget, the Youth Jobs Path program, will provide $751.7 million over the next four years to get people under 25 and currently on employment benefits trained to be job ready and enter the workforce.

Youth Jobs PaTH

From the beginning of next financial year, young job seekers, who are actively looking to boost their job-readiness, will participate in intensive pre-employment skills training within five months of registering with jobactive.

In stage two, there will be an internship programme with up to 120,000 placements over four years. This will help young job seekers who have been in employment services for six months or more to gain valuable work experience within a real business.

And each intern will work 15 to 25 hours per week and receive $200 a fortnight on top of their regular welfare benefits. Prospective interns will need to have been looking for a job for at least six months.

Infrastructure

An amount of 50 billion dollars is being delivered for the period 2013-14 to 2019-20 for road and rail infrastructure across the country.

Victoria will get almost $ 3 billion on new infrastructure projects. Mainly for The state’s Western Ring Road $350 million, Monash Freeway $500 million, regional highways $345 million and $75 million to combat congestion in urban areas.

Queensland will get nearly $200 million for upgrades to the Ipswich Motorway in the state’s south-east.

Working Parents

The Government has held off implementing the childcare subsidies, which were a major sweetener in last year’s budget.

Smokers

The price of cigarettes will rise along with tightening limits on what can be brought into the country duty-free.

The country’s 2.5 million smokers will be hit once again, with four annual rises of 12.5 per cent in the tobacco excise. Almost 70 per cent of the cost of cigarettes will contribute to government excise by 2020.

Farmers and tourism operators

Despite the heavy criticism, the Budget did not announce any changes concerning the proposed backpacker tax. Government will change the residency rules and remove the tax-free threshold for overseas working holidaymakers in Australia. The changes are proposed to apply from 1 July 2016 and, awaiting any direct announcement by the Government.

High income earners

From July 2017 the income threshold above which the additional 15% Division 293 tax cuts for superannuation concessional contributions will be reduced from $300,000 to $250,000.

The 30% of contributions tax rate will now be imposed on individual earning $250,000 a year down from $300,000.

Also the government will reduce the annual concessional contributions cap to $25,000 a year.

1) Don’t believe in love at first sight

When making an investment don’t let your emotions overtake you. This will negatively affect your decision to buying a good home. Consider the value, and location of the house, and don’t fall in love with the size, wall colors or interior design of the house , as these will wear out soon (There are important and you can change them at any time), but value will always go up. Be wise and focus as it is a future investment.

2) Who’s That Girl in the next door?

Don’t be fully engrossed by the thought that you have found your ultimate dream home. Walk around the neighborhood, find out if it is for you. Observe what happens in the neighborhood on a typical day, and what you find out might surprise you, or even lead you to think twice of your thoughts. Drive by to see if the facilities around your house can be well adjusted to your current lifestyle. Find out how close by the shops are, the schools are, and whether the route to work from your new home is the best way to work (more or less traffic). Having great schools and shopping centers near the house might even affect the future value of the home. (Word of caution: too close to schools may cause heavy traffic)

3) Don’t Try to Time the Market

Time in the market is more important than timing the market. Don’t keep anticipating for the right time to buy the right house, or wait until the housing market drops its prices, because you might miss in seconds. You will probably never find what you wish for. Spend time in the real estate market to find what you desire and can afford, and if you find it buy it.

4) Savings and credit history does matter

Firstly, if you want to get the best loan to invest for your new home, having a stable bank account is important when you are close to buying a new home. Do not apply for any credit cards or loans, or make costly investments, because having a clear credit profile with no debts will let you get the best out of your lender.

5) Is Pre-approval vital?

Don’t waste your time looking around for houses that will never be the “ONE”. Getting an approval for a loan before you start looking for your new home, will save you a great deal of time, that you would have spent searching for houses that you are not even close to afford. This method is much better than receiving a mortgage pre-qualification, because the lender has checked your credit status and approved for a specific loan amount, not an estimate.

6) Why you need a professional

Hiring a home inspector when you are buying a home will save you a lot of money. He/she will provide you with the professional service of ensuring you buy the right home with the right features at the right price. Trust in a professional’s opinion is worth thousands of dollars than investing and losing a fortune, rather this will cost you just about $200. If the inspector finds any faults in the house, you can even negotiate with to lower the price of the house.

7) Avoid Sleeper Costs

Beware of progressive costs of buying a new home. As a new home buyer you certainly won’t stop or be limited to paying the mortgage for your house. With buying a new home, comes all other expenses such as property taxes, body corporate fees, other utility expenses, maintenance fees and much more. Therefore ensure that your budget fully covers these expenses before you buy your dream home, and avoid making it a nightmare

8) Bidding Secrets

Bidding for a house is not simply calling out numbers that come to your mind. It is important that you carefully consider the below factors:

1.  Firstly your budget (giving a bid that you can afford)
2.  Giving a bid worth your property
3.  It must be a reasonable bid (do not provide numbers that are obviously out of the frame)
4.  Consider the neighboring house prices and bid an average price per square foot
5.  Sellers today have more debt in property taxes, this can be used as a great tool of negotiation
6.  Finally consider giving an odd bid, because it might make the sellers think you have invested your time in that property, well.

9) Bigger Isn’t Always Better

Buying the biggest house you find might make you feel in the present time, but certainly not in the future when you are planning to sell it. Although your house may be the largest and the most expensive in that residential area, if the other houses around you does not increase in, then definitely your house value will also not go up. Therefore due to large houses having less interested buyers and limited appreciation in the above case, it is better to reach for the worst house, as it will be traded for a higher value than the biggest house.

10) Avoid a border dispute

Pay attention to what exactly you are planning to buy. This includes the size of the property, where your land starts and ends, and how many cars can be parked within. Having this knowledge can limit future issues with your neighbors. Also above information will help you with knowing how much you have to pay as your property tax in the future.
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