How much will tax cuts help homebuyers?
Most Victorians are aware they will get a tax cut from the start of the new financial year. However, based on recent discussions we’ve had with lots of people in the City of Hume, quite a lot of us aren’t all that sure of how much that tax cut will be or, more importantly if you’re a home buyer, how that might impact on your ability to buy your next home.
In case you missed it, the Australian Government amended our tax rates that come into effect from July 1st, 2024. These changes include:
- The former 19 per cent tax rate will now be 16 per cent;
- The former 32.5 per cent bracket will now be 30 per cent;
- The 37 per cent threshold has moved from $120,000 to $135,000; and
- The 45 per cent threshold has moved from $180,000 to $190,000.
So what will that mean to your pay packet from July onwards? Well, obviously the total tax saving will depend on your current income, but here’s a couple of examples:
- If your current income is the national part-time average of $67,520, your total tax bill will be reduced by $1,367 next year, or a bit over $26 per week.
- If your current annual taxable income is the national average of $92,030, your total tax bill will be reduced by $1,980 in the next financial year, or a bit over $38 per week.
- If your current annual taxable income is, for example, $150,000, your total tax bill is expected to fall by a bit over $3,700, or a bit over $71 per week…and so on.
The reason this is particularly important for home buyers is that your increased income after tax can have an immediate impact on the amount that you are able to borrow to fund your next home purchase. In fact, we’re hearing from a number of mortgage brokers that quite a few lenders are already factoring in these changes when assessing applicants’ borrowing ability.
So if you haven’t already done so, we’d suggest that the coming week might be an ideal opportunity to touch base with your broker to get an update on what your budget looks like. Keep in mind, if you need an introduction to an experienced and approachable mortgage broker, don’t hesitate to ask. Don’t forget that their assistance won’t cost you a cent and could save you thousands!
Of course, if you need any advice or assistance on finding the right property to move to, or getting the right result on your current home, the team at Barry Plant Gladstone Park is always happy to help, so give us a call anytime on 9330 1088.
Cheers,
Bill Karp - Director
Barry Plant Real Estate
Gladstone Park