March 30, 2022

Australian Federal Budget 2022
The AfterPay Budget
Vote Now Pay Later!

Last night, Treasurer Josh Frydenburg delivered the Australian Federal Budget for the next 12 months. But in reality, with the election about to be announced – with an expected poll date of May 14, 2022, (the PM mentioned this date on 2GB this morning) the budget’s main aim is solely to get the Government to that date, and, they hope, elected, despite all polling indications, for a further term of Parliament. The key elements announced and widely reported relate to what the Government calls ‘cost of living’ support. With costs rising over the last few years and significantly in the last few months due to rising fuel prices, supply issues and a lack of wage rises for most Australians, a ‘correction’ in the economy, with an easing of the financial pressure that many have been feeling over the last few years is desperately needed. So what has been offered and forecast?

$250 one-off payment to those on the following payments:

Age Pension.
Disability Support Pension.
Parenting Payment.
Carer Payment.
Carer Allowance (if not in receipt of a primary income support payment).
Jobseeker Payment.
Youth Allowance.
Austudy and Abstudy Living Allowance.
Double Orphan Pension.
Special Benefit.
Farm Household Allowance.
Pensioner Concession Card holders.
Commonwealth Seniors Health Card holders.
Eligible Veterans’ Affairs payment recipients and Veteran Gold cardholders.

The payments are exempt from tax and will not count as income support for the purposes of any income support payment. A person can only receive one economic support payment, even if they are eligible under two or more categories outlined above. The payment will only be available to Australian residents. This is a one-off payment and NOT an ongoing increase to any of these benefits. The ongoing discussion of the appropriate level of support for pensioners and Jobseekers has not been addressed In the budget. The payment will occur in April 2022 – i.e. after the election has been called but before the polling date.

Temporary reduction in Fuel Excise

The Government will help reduce the burden of higher fuel prices by halving the excise and excise-equivalent customs duty rate that applies to petrol and diesel, and all other fuel and petroleum-based products except aviation fuels, for six months. This measure will commence from 12.01 am on March 30 2022, and will remain in place for six months.

However, this may take 2-3 weeks to be seen ‘at the bowser’ as existing stocks are sold and then replaced. Ongoing fluctuations of the crude oil price, production costs and exchange rates may add to or diminish any benefit actually seen at the bowser.

Note that the calculation of indexation will continue to happen over the 6 month period that this ‘relief’ will occur, so when the excise is returned to its ‘normal’ levels in October, we may see a price increase that is well above the 22 cents per litre reduction that we are currently hoping for.

Increase in low and middle-income tax offset

For a number of years, there has been a ‘non’ cash refundable’ tax offset that has been continually extended for ‘one more year’. We have this situation again, but this time with a last ‘bonus’ of $420.

This is the “$420” relief payment that has been described as a ‘cost of living’ tax offset in the budget.

It will apply to everyone who has a taxable income of LESS then $126,000, and its timing is dependent on the lodgement of your 2022 tax returns. i.e. it will NOT be paid before July 1, 2022, and may not be received by many until well into the second half of the year.

Note also that if your total tax payable is less than the total value of the rebate, you may not receive all or any of the benefits.

What has not been mentioned is that this is – at this stage – the FINAL year of this offset, which has been extended year after year for some years now. With the stage 3 tax cuts due to be introduced in 2024-25, people on ‘middle incomes’ ($45,000 to $126,000) will face an effective tax increase in the 22/23 year (i.e. from July 1), So while anyone with an income under $126,000 will receive a benefit of an extra $420 after July this year, they face an additional tax take of $1,080 after July next year. The ‘Afterpay’ effect!

Changes effective for business – and ‘creating growth opportunities’

Skills and training boost.

The Government will introduce a skills and training boost to support small and medium-sized businesses to train and upskill their employees. The boost will apply to eligible Expenditures incurred from 7:30 pm (AEDT) on March 29 2022 (i.e., Budget night) until June 30 2024, by Small and medium-sized businesses (with an aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of Expenditure incurred on external training courses provided to their employees. The external training courses will need to be provided to employees in Australia or online and delivered by entities registered in Australia.

Some exclusions will apply, such as for in-house or on-the-job training and Expenditure on external training courses for persons other than employees. (Without any legislation, this is open to debate, but it may mean that directors of companies/self-employed business owners CANNOT claim their OWN external training. But until we get details, we cannot be certain. That is not likely to occur until after the election as the changes required for this are not likely to pass through Parliament before the election.)

But while this applies to eligible Expenditure incurred from today, the actual benefit (tax deduction) will not occur until June 30, 2023. i.e. Expenditure from today to June 30, 2022, can ONLY be claimed in the NEXT tax year.

So, using Frydenburgs example from budget night. If you spend $100 on training your staff ‘today’, you can claim a $120 tax deduction (which, with a corporate tax rate of 25%, gives a tax benefit of $30 in 2023 instead of $25 in 2022) and reduce your tax sometime after July 1, 2023.

Technology Investment Boost

The Government will introduce a technology investment boost to support digital adoption by small and medium-sized businesses. The boost will apply to eligible Expenditures incurred from 7:30 pm (AEDT) on March 29 2022 (i.e., Budget night) until June 30 2023.

Small and medium-sized businesses (with an aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of Expenditure incurred on business expenses and depreciating assets that support their digital adoption (such as portable payment devices, cyber security systems or subscriptions to cloud-based services).

An annual cap will apply in each qualifying income year so that Expenditures up to $100,000 will be eligible for the boost. This equates to a maximum additional deduction of $20,000 per eligible year.

For eligible Expenditure incurred by June 30 2022, the boost will be claimed in tax returns for the following income year. For eligible Expenditure incurred between July 1 2022, and June 30 2023, the boost will be claimed in the income year in which the Expenditure is incurred.

Whether this applies to current subscriptions (such as Xero, office 365 etc.) that are being used or only ‘new’ acquisitions is unclear. And, in the same way, as the ‘skills’ boost, anything incurred that can be claimed in the current year will not be claimed – or provide a tax benefit – until the end of the 22/23 tax year – so the ‘financial benefit’ will not be seen until after July 2023.

Varying the quarterly tax instalments

For those who have ongoing PAYG instalment payments (company tax instalments, investment income or sole traders), the annual calculation of the instalment has often been based on ‘last year’s income plus 10%’ to work out the expected income on which the tax is calculated.

For the next 12 months, the Government has reduced this ‘uplift’ to 2%, so the amount required to ‘cover’ the quarterly instalment will be lower.

While this will assist cash flow in the short term, the kicker is that if your business HAS increased its profit substantially in the year, it will have a LARGER year-end tax bill, as you will have paid less tax ‘as you go’.

The next change – proposed for January 2024 – is to base PAYG instalments on the ACTUAL quarterly performance “Where Business accounting software permits this”. i.e. we may be approaching the need to lodge ‘adjusted profit reports each quarter’ to calculate the tax instalment that needs to be paid. This may have some benefits where income and expenses are very ‘seasonal’ or where there is a large fluctuation in profit each quarter, meaning less tax is paid when times are harder and more paid when funds are flowing – but it will also require all businesses to be ‘on the ball’ with their accounts every month to keep track of their tax liabilities as they go. There will be more on this AFTER the election!

Apprentices and trainees

The Government has extended its support in boosting the apprenticeships scheme, providing A$5000 payments to new apprentices over two years and extending subsidies of up to A$15,000 for employers who take them on.

Frydenberg said the Government would also support an additional 800,000 training places with a A$3.7 billion investment.

Will there be sufficient funding for the TAFE places required for these apprentices? And will they be limited to specific industries? We await more details.

Infrastructure

The budget also makes commitments to several strategic infrastructure projects around the country.

There are budget commitments for faster rail projects from Brisbane to the Sunshine Coast, from Sydney to Newcastle, Perth’s METRONET project, the North-South Corridor in South Australia, Great Eastern Drive in Tasmania, and Central Australian Tourism Roads in the Northern Territory.

There is also an investment in the Melbourne Intermodal Terminals to increase the efficiency of the national freight network, and more than A$500 million for local councils to deliver priority projects and A$880 million to better connect regional Australia with ports, airports and other transport hubs.

The worry here is the usual – announcements, not action. And As Leigh Sales on 7:30 last night stated – if you overlay the location of most of the announced plans with the electoral map, they are focused on marginal seats, or seats that the Government need to retain or win. Infrastructure Australia has approved only 12% of the projects, so the announcements don’t tie in with economic or social priority or need in many cases.

Ok, so what are the costs and the losses?

Renewable energy

Federal government spending on climate change measures will decline every year for the next four years. This includes the spending on carbon credit purchases, the Clean Energy Finance Corporation, Australian Renewable Energy Agency and the Clean Energy Regulator. Spending will drop from $2 billion in 21/22 to $1.3 billion on 25/26. We are 7 years from the 2030 ‘threshold’, and the Government is reducing its activity in this area. Any change will need to come purely from the ‘market’ or state government action.

You would think that the Lismore floods, the bleaching great Barrier Reef, and the constant downpours in Sydney would have affected policy action.

The Rise and Fall of The Arts

It seems that far too many see this area as being ‘just a nice thing to have’, forgetting the size of the industries involved – Film, TV, Music, Theatre, galleries, pubs, clubs, dance etc. But it falls away for some when it comes to the economic factors. A $111.7 billion sector in 2018 – 6.4% of GDP. But not considered worthy of a separate ministerial portfolio in the current Parliament.

Total Federal spending is forecast to reduce by 20% in 22/23, with a $140 million reduction in the RISE funding – from $160 million to $20 million, and then no further after the 22/23 year. This funding supported the ‘rebuild’ of various festivals, tours, exhibitions etc., but needs to continue to help rebuild a sector that was decimated over the last 2 years. There is no growth (beyond marginal CPI increases) in any other part of the Arts funding either. In fact, the total funding is expected to fall from $799 million in 22/23 to $744 million in 25/26. Australian Music Administration spending drops from 6.3 million in 22/23 to nothing in 24/25. Regional Arts funding falls from $18 million to $7 million in 22/23.

At a time when Film Production and post-production, animation, gaming, and music production has the ability to grow and be globally significant, with an “Australian flavour”, the support to grow the sector in all parts of the country is being removed.

Do you wanna build a submarine, I mean a snowman?

Ring the bell – its closing time…

With the ‘end of the pandemic’ and lockdown provisions, a number of the policies put in place over the last few years are now ending.

Temporary Full expensing will finish June 2022 – so if you want to claim a full 100% tax deduction ‘up front’ for your equipment or business vehicle purchase, it now MUST be ordered by this June 30 and installed for use by June 30, 2023. Any expectations that this would continue have now finished, and from July 1, 2022, the previous depreciation rates will apply again.

This may also have implications for other ‘instant asset write-offs’, which will need to be examined as regulations and legislation are put in place.

The forecasts!

The budget forecasts that a ‘strong labour market’ will mean an unemployment rate of less than 4%. They say that this will drive wages growth with a forecast increase of 3.25% in wages over the coming year.

But, Unemployment is being defined as Less than 1 hour of work per week. If we used the same definition as the last time Australia had a sub 4% unemployment rate, we would be looking at something closer to 16.3% taking into account the underemployed levels, so the expectation of wage growth, being based on ‘supply and demand issues alone’ has to be tempered by this factor. Wages won’t necessarily rise if a large pool of underemployed staff can simply have their hours extended instead of being paid ‘more per hour’.

Inflation is forecast to reduce from 4.25% to 3% 2.75% in 23/24, but this will be very dependent on commodity prices falling (including oil), supply change improvements, and exchange rate stability. Any or all of these factors could see inflation stay over 4% p.a. or climb higher – which may lead to interest rate adjustments happening sooner rather than later.

The deficit for the current year is now forecast to be $80 Billion – down by $20 Billion on last year’s forecast (due to higher commodity prices for what we dig up and ship overseas), and ‘stabilise’ at around $78 Billion for the 22/23 year. With ongoing tax revenue increases – arising out of wage and profit growth leading to more tax being paid – the budget is still expected to be $40 Billion in deficit in 25/26.

The Treasurer claims that we have ‘turned the corner’ because the debt peak will now be ‘not as high’ and ‘a bit sooner’ than previously forecast. This sounds like the “Back in Black” pronouncements in the year before the pandemic – which were already proven wrong before that nasty little virus shut most of us into our homes and 5 km walk zones for the last 2 years! A treasurer’s forecasts are often as accurate as the old Lou Richards Kiss of Death Football Tips, so we take much of this with a large pinch of salt.

Total Government spending is around 26% of GDP – It never peaked above 23% of GDP under the previous Labor government. Tax revenue is around 24% of GDP (also higher than the Labor years). So, currently, the Government has what is called a ‘structural deficit’ (in basic terms – it is spending much more than it is earning). While I won’t fall into the simplistic’ home budget’ comparisons, and there are many who will argue that it does not matter if a government runs deficits all the time (as who is going to bankrupt them?), it is much like developing a business – at some point in time, you DO expect that the revenue is going to be greater than the spending, and you recover some or all of the money that you have spent or invested in getting the business going. Repeated waste and inefficiency or politically motivated decisions make this harder to overcome, and governments need to improve their performance in this aspect regardless of their political colours. Much of the deficit could be recovered in this way. E.g. Defence spending, while overall being necessary, has seen so many examples of botched equipment purchases that have cost billions and produced nothing. This money could have been re-purposed for far better uses and saved considerable money and pain.

In the words of Ross Gittens in the Age / Sydney Morning Herald:

This budget is not as fiscally responsible as the Government would like you to believe when it’s claiming to be the party of good economic management, but nor is it as fiscally irresponsible as it would like you to believe when it is claiming to have fixed your problem with the cost of living.

We await the Opposition’s reply, and let the election campaign begin!

by Fiscal Artisans

August 26, 2021

I’ve got the Lockdown Blues – cause I can’t play to a crowd!

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With the series of lockdowns and curfews occurring in Victoria since May 27, 2021, one of the most affected areas, is the performing arts industry.

Singers, musicians, writers, actors, and also the associated crew and support, including technical, retail and merchandise, and event promotion staff and businesses have been shut down throughout the strate, with little or no support. Even as venues open, density limitations have meant that many places have cancelled performances that had been booked months in advance.

Many of the people affected have not qualified for the various business support grants, usually because they are not GST registered, are subject to more casual or intermittent work, and may not be as ‘structured’ as many other business operations. (We can do something about that – but that is the subject of a separate discussion that we are happy to have one on one with you)

The Victorian Government has provided a level of support – for both the individual performers and crew, as well as venues who have had gigs and performances shut down by the metropolitan or regional lockdowns.

There are two Support funds currently available to assist those affected:

1. Live Performance Support Program (Suppliers) Round Two

This provides support to ‘contracted suppliers’.

Who is a contracted supplier?
This is defined in the program as:
A contracted supplier to a live performance event is a business whose primary activity is the delivery of a featured or advertised performance or other goods and services to support the delivery of a live performance event. This may include performers, crew, venues, merchandise sellers, technicians and engineers, as well as the ‘on stage’ performers.

And it is not limited to music performances. It is a “Live Performance Event”, which presents creative/cultural content and may include but is not limited to music, singing, theatre, opera, dance, comedy or arena event. It does not include sporting, business, private or educational events in this grant scheme. (Some of those businesses are covered in other Support funds currently being offered)

A Payment of $200 or $500 per event is possible (based on what the fee for the cancelled performance would have been) with payment for up to 20 gigs (to a maximum of $4,000) possible within the funding round.

The performance will need to have been planned as follows:

To be delivered or performed between May 28 and September 2, 2021;
Live, in-person audience (i.e. not ‘just’ a streamed performance)
Held indoors or outdoors
With an expected audience of at least 75 people or a series of performances over multiple days at the same location with an expected minimum audience of 200 or more. (I am seeking clarification on how this is impacted by density limitations that were in place prior to, and during, the lockdown periods)

This funding also applies for interstate gigs – i.e. Victorians who were meant to ‘cross the border’ and perform or work interstate in the same way, would be eligible for this support grant.

Where costs incurred / claims are between $200 – $500 per gig, then a grant of $200 is applied. For costs of over $500, then a $500 grant is paid.

2. Live Performance Support Program (Presenters) Round Two

In a similar way, there is a support fund for the ‘venues’ that have been impacted by the lockdowns and suffered losses as a result.
The terms and conditions of this grant are similar to the ‘suppliers’ grant, regarding dates, type of performance and estimated attendances. For the Presenters, a funding claim is possible for up to $7,000 for one event, with a further claim for a second event for up to $5,000 also possible.
This grant is also available to performers who were intending to promote their own show as well – i.e. it is not limited ‘just’ to established venues (pubs, clubs, etc)

For this grant, it may be necessary to identify ‘key suppliers’, from whom the presenter intended to receive goods or services, with up to 10 suppliers identified. This of course, could be food and beverage suppliers, performers, venue hire and crew.

Closing date for applications – and estimated payment timelines

The final date (currently) for lodgement of the application is September 8, with payment ‘anticipated’ to occur within 15 days of the closing of applications – so it would be expected to be paid by September 23.

A number of items must be included within the application, and a few background checks on items like ANZSIC codes, ABN, and related registrations must be confirmed before an application is lodged. This reduces the possibility of delay or rejection of the claims.

We can assist you with the process, prepare and lodge the claims on your behalf, and monitor the claim process with Business Victoria after it has been lodged.

If you – or anyone you know – may be eligible for these support funds, please call me on 0409 788 399, or email me at stuart.smith@fiscalartisans.com.au to discuss your situation and work on your application.

I look forward to hearing from you!

Rock on!

Stuart

For more information on Fiscal Artisans, please go to our website

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by Fiscal Artisans

May 31, 2021

Is Property Still a Good Investment?

As we approach Tax time again – it’s only four weeks away now! – the questions around tax deductions for this year and beyond start coming in thick and fast.
And one of the most common questions is – can I get a tax deduction from buying a property?

Of course, the answer is yes – provided that it is an investment (not something you are living in yourself) and the costs of the property – interest and running costs – are higher than the rental received.
I have been keeping track of the median value of property in Melbourne over the years, and the following graph shows how it has moved over the years. This is based on the June median value across all dwellings (houses and apartments/units) from 1970 to 2020. It takes out the month by month variation and keeps to a consistent position – outside of the ‘spring and autumn rush’ for each year.

While there was a drop in the 2019 year, Covid in itself does not appear to have had as big an impact on prices as many thought. The December median price for houses was $750,000, and for units, it was $605,000. So, even in a Covid affected year, prices have continued to rise.

But, as I am often asked – is property still a good investment? I mean, how can prices keep increasing?

There are many elements to this issue, so let me try to go through some of them for you.

Over the last 40 years, we have seen substantial rises in property prices, and many will say that ‘it cannot go on like this’. As I see it, the key factors for the ongoing increases in prices are as follows:

1. Household incomes have increased.

Beyond the simple fact of steady increases in annual salary for most people (even if the increases have been very modest over the last few years), the increase in the female workforce participation over the last five decades has meant that most households have seen an overall increase in total income levels available.

Increased childcare and early childhood education, and better health arrangements, have also meant that it has been easier for most couples to have both members in the workforce simultaneously, leading to more disposable income, savings and debt reduction capacity.

This has also meant that there is ‘more money on hand’ to cover loan repayments, making higher loan balances more affordable.

Data from the Australian Institute of Family Studies in 2020 suggests that: “Changes to employment patterns, including a larger female workforce, have resulted in significant increases to household income, with the 2017/18 financial year average weekly household income at $2,242 before tax, up from $1,361 in 1995/96.”

That’s an increase of 65% in just over 20 years. As a result, it is likely that household incomes have increased by 85% or more since 1980.

2. Loan terms have changed

Over the last 20 years, the standard loan term has increased from 20 years to 25 and now 30. This may not seem like much of a benefit when you consider the extra interest payments, but it has a big impact on affordability and how much people can borrow.

Let’s say you are looking at purchasing a property and seeking a $500,000 loan. The bank offers you a loan over 20 years at 3% p.a.

The cost for a Principal and interest loan on this basis would be $2,772.99 per month.

Now, if we stretch that loan out to 30 years – what is the monthly payment?

It is $2,108.02 per month – a saving of over $600 per month.

But what if we go the other way and say – well, I can afford $2,773 per month. How much could I borrow with a 30-year loan?

The answer is $657,724 – $157,000 or 31% more!

So, for the ‘same’ monthly savings/investment, the scope to purchase a higher value property (or to bid to a higher amount at an auction) is suddenly realised.

Having worked with many finance brokers, spoken to many bank managers, and seen the assessment processes that the bank uses in calculating loan approvals, this element is very much in the picture. i.e. the banks don’t look only at the total amount that you are looking to borrow. They look instead at how much of your income it will take to repay the loan every month. If the monthly payment is below a certain % of your total income, and other factors agree, they will approve the loan – no matter how big it is.

The banks also know that, in many cases, a loan is renegotiated, or paid out with 5 – 7 years, so their risk factor is reduced significantly. Higher prices and ‘affordability’ reduce their risks even further as a result.

3. Interest rates have dropped

And with the second point, this is the big change in the market over the last 20 or so years.

The website infochoice says: “Interest rates on home loans hit 10.38 per cent p.a. in July 1974 and stayed at around that level until September 1980.”

Let’s do the maths on the same 20-year loan as per above, but with a 10.4% interest rate instead of 3%.

A 20-year loan costing $2,772.99 per month would only get you a total of $279,628. Compared to the $657,724 shown above for 30 years, or $500,000 for 25 years.

Falling interest rates have more than doubled the borrowing capacity over this time.

But you say, surely interest rates cannot stay this low?

In time, you may be correct. Assuming that the economy ever gets back to what it was like ‘in the good old days’ before Covid, interest rates will – almost certainly – increase. But if they have been pushed up, then it is because inflation has increased as well, meaning that what is borrowed in “today’s dollars” will cost less to repay in ‘tomorrows dollars’ – and inflation is likely to have pushed the price of property up further as well.

A good indicator in most cases is the fixed rates on offer for 3 to 5 year terms (Very few banks offer anything longer here in Australia). Currently, many of these fixed-rate terms are lower than the standard variable rate on offer. While this is partly due to ‘special covid arrangements’ the Reserve Bank put in place to assist the banks, it is a key measure to watch to see the direction of interest rates in the short to medium term. It is only my opinion, but I don’t believe we will see any significant change in interest rates for at least three years. Inflation would need to reach over 5% for two or more years before the Reserve Bank decided to pull the reigns in tighter.

4. Population growth and demographic changes.

There is where I see a generational shift in the demographic make-up of the Australian population.

This change arises from many factors, with immigration only being one aspect (and that is limited in the current ‘closed border’ situation).

While point 1 highlighted the impact of the ‘two income’ family arising out of the increasing female workforce participation, it also has had the impact of far more ‘solo’ income households, and the ‘professional couple’ groups – friends who are not in an intimate relationship, but who live – and invest – together, to step into the property market (or simply to save on living costs and increase scope for saving and investing). Sharing a flat in uni, becomes sharing a home, becomes sharing an investment property.

At the other end of the marital relationship, where marriages have broken apart, each member of the couple often needs to acquire their own residence. One household becomes two, each with “extra space for the kids” and a shared work or study space as well. I know I have assisted a few clients with such a transition, to understand the growing impact this has on property demand. And the need to ‘re-establish roots’ is hugely important in this area.

This has led to an increase in the number of one and two-bedroom dwellings being required in the inner suburban and city areas and an increase in the ‘townhouse’ type dwelling in the inner and middle rings of Melbourne. i.e. affordable, compact but with facilities, near to work and social requirements. The quarter-acre block is being replaced by a fully functional townhouse that has group amenities and social connection.

There is also a large amount of ‘generational transfer of wealth’ happening, and at a later age than for previous generations, where our parents and grandparents are passing on in their 80s and 90s – instead of their 50s and 60s, as was often the case in pre-war generations. This has meant that the inherited wealth is often larger – as it has had the benefit of time to grow – and it is going to children who are more ‘set’ in their financials plans, and are able to use more of the inheritance for investment, rather than for covering living costs.

So, where to from here?

So, based on the above, you can see that the increasing ability of people to afford home loans means that there is an increased ability to ‘invest’ in property – be it for their own living requirements or investment purposes.

The ongoing ability to claim rental property losses as deductions against other taxable income – and then have the profits made from the sale of the investments taxed at a discounted rate – makes the residential property an attractive form of investment.

What Covid has somewhat ‘driven home’ is that people do not have to ‘commute’ as much to work. More and more of their employment can be done ‘from home’, leading to a significant shift in demand for property from the ‘inner circle’ to both the middle suburbs or increasing the ‘tree change/sea change’ element for many people. After all, if you are stuck in front of a laptop most of the day, wouldn’t it be nicer to look out over an ocean view than the Jolimont railyards? Or to know that the surf is only ten minutes away when you finish work?

As a result, much of the demand – for both purchase and rental – are occurring in ‘planned developments’ where lifestyle and living facilities are being included from the start or are centred around areas that have well-established facilities, such as schools, hospitals, transport links, and local employment opportunities.

Various locations are ‘targeted’ for growth, resulting from the Victorian Government’s Melbourne 2030 plan, with its emphasis on Principal and Major Activity Centres, identifying the likely growth areas within the metropolitan region due to increased infrastructure, employment, and transport connections. Some areas will grow faster than others, and the opportunity to invest in this growth can be taken with proper research and due diligence.

There are some good opportunities in the market and scope to invest for medium-term growth and short-term tax benefits. With marginal tax rates of 34 to 49%, the total cashflow investment required to fund a property investment can be ‘tax effective’ and, over time, provide a solid base for your investment portfolio.

We have a team of associates that can help with many aspects of this investment, from investment property selection to bank finance and legal support. We can analyse the choices and show you how the tax savings can assist in funding the investment and how to optimise your choices.

For more information or to discuss your tax position or investment opportunities, please contact us on 0409788399 or info@fiscalartisans.com.au

Budget2022 – Fiscal Artisans