The new financial year has started and with it comes a multitude of new conditions to comply with. Chartered accountant GAIL FREEMAN gives an update on some of the most important ones…

Happy new financial year. Here are some of the changes that will start in the new year.

Recently I wrote about changes to portable long service leave for those in the hospitality and hairdressing industries. Originally this was to start on July 1. The ACT Government has now postponed its start until January 1. For those in the affected industries, this is a saving of 1.07 per cent on their payroll every week.

Payday super is now in effect. Businesses will have to pay employee superannuation every pay day. If it is not received by the fund within seven days, then it is late and employers must pay superannuation guarantee, which now is tax-deductible.

Unpaid super due for the period April 1 to June 30 will need to be paid by July 28. The way payments in July are allocated is firstly to payday super, then to the super that’s owed. If this is a little confusing, seek help as to what needs to be paid by when.

Yes, there are tax cuts, which will result in an annual tax saving of up to $268 a person. There will be further tax cuts the following year. And a $250 tax offset for those in the workforce effective from July 1 2027.

For those with limited tax deductions, effective from July 1, a standard tax deduction of $1000 will be available to people, who earn income from working, without substantiation. Larger claims will still be able to be claimed, but they will require substantiation.

The budget changes to negative gearing and capital gains tax have passed parliament and have received royal assent. They are now law. Taxpayers will have until July 1 2027 to reorganise their affairs and make relevant changes.

The government has proposed, effective from April 1 2027, that the health insurance offset for people aged over 65 will be removed so that it remains at the same level as if you are under 65. This legislation is not yet passed.

If you own a holiday home or property you use for short term rentals, the ATO has set out a new interpretation for claiming deductions such as interest rates and depreciation.

In order to claim these, the property must be genuinely available for rent and marketed to earn income, with reference to peak holiday periods. This means owners cannot use their property during Christmas, Easter or school holidays and still obtain deductions.

Please seek professional help so that you make sure you are doing it correctly to avoid falling foul of these new provisions. The only claimable expenses against the rent will be direct rental expenses such as advertising, commissions and cleaning costs if you do not satisfy the ATO’s new interpretation.

This list of changes is not exhaustive. There are certainly restrictions and cash flow issues for businesses and investors. Please make sure that you are aware of all these changes so that you can maximise your tax position going forward.

If you want to know anything about tax or the tax changes, please contact the expert team at Gail Freeman & Co Pty Ltd on 02 6295 2844, email [email protected] or visit gailfreeman.com.au

Disclaimer
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.

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