Federal Budget: the pros and cons for property
More than a month following the Federal Budget, the environment hasn’t changed much when it comes to property.
That doesn’t mean Budget decisions will have no effect, as most changes have yet to be introduced on the ground and some are still years and even decades away.
Here’s a run-down on property-related Budget changes, and the things that stayed the same.
- Negative gearing remained unchanged in this Budget, although some commentators believe its days are numbered.
- Raising the retirement age to 70 may add to the appeal of property investment for Gen Xs and Ys who don’t want to have to work so long.
- Changes which could see university fees rise – and will see interest on student loans rise – may force graduates to delay buying their first homes.
- Economists believe interest rates are likely to remain low until next year, partly as a result of the public reaction to cuts.
- Infrastructure funding could prompt opportunities in areas that are set to benefit from major projects such as Melbourne’s East West Link and Sydney’s WestConnex.
- Some family budgets will be crimped by changes to family tax benefits to be introduced next July, which could affect their housing choices.
- The National Rental Affordability Scheme has been scrapped going forward but existing investors will not be affected.
- The family home remains exempt from asset testing for the age pension and from capital gains tax – to the relief of many older Australians.