Last year’s Federal Budget was described as the housing market budget however, this year’s Federal Budget delivered in May is anything but that. Last year, rising housing costs were an issue Treasurer Scott Morrison recognised was noticed by all Australians. This year there was no such gesture. As far as residential and commercial property is concerned, there were very few elements of the budget that will have any effect.
There were a few noteworthy things that will, of course, affect some property owners and business owners in the south-east. Here are some of the cold hard facts.
The Government has moved to further its crackdown on multinational tax avoidance by closing more loopholes, meaning multinational companies will have a harder time evading the tax man.
Costs associated with holding vacant residential or commercial land will be denied as deductions. Some may be able to be included in cost base subject to satisfying existing cost base tests. This, however, will not apply to land used to carry out business, or to expenses incurred after the property has been constructed on land that has established occupancy approval, and is offered for rent.
Businesses impacted by tax rate changes will need to thoroughly examine turnover thresholds which allow for the turnover of connected entities.
There was no update regarding the ability of Managed Investment Trusts (MITs) to hold residential property. Last September the Government released draft legislation which banned MIT’s from owning residential property other than affordable housing.
The Government will divest land in Queensland, currently owned by the Australian Communications and Media Authority. The announcement flags that the property can support up to 400 new homes for metropolitan Brisbane. The announcement has blindsided Redland City Council Mayor Karen Williams’ plans for a university campus on the 80-hectare site at Birkdale.