In a Budget targeting the hip pocket, some of the big ticket measures were:
LMITO Increased
The low and middle income tax offset (LMITO) will increase by $420 in 2021/22. Thus, eligible individuals may receive a tax offset of up to $1,500 upon lodgement of their upcoming 2021/22 tax returns. This will be for those earning between $48,001 and $90,000 but phasing out up to $126,000.
Depending on your personal tax position, this could certainly act as an incentive to get those tax returns lodged early this upcoming tax season.
$250 Cost of Living Payment
A once-off, tax exempt, cost of living payment will be made to six million eligible pensioners, welfare recipients, veterans and eligible concession card holders.
This will provide immediate relief as the payment is made next month (April 2022).
COVID Test Expenses Deductible
As announced last month, the cost of taking a COVID test (PCR or RAT) to attend work will be tax deductible, dating back to 1 July 2021. There’s also relief for employers in that FBT will not apply where COVID tests are provided to employees in this context.
Employees and employers should retain proof of their expenditure (e.g. receipts
2022/23 Income Tax Rates Unchanged
The tax rates for the upcoming financial year remain unchanged from the current year. The next round of personal income tax cuts, which have already been legislated, will not come into effect for another couple of years (from 1 July 2024).
Temporary Reduction in Fuel Excise
This has been reduced by 50% for a period of six months. If passed on in full, it will result in the excise (and the price of fuel) being reduced by just over 22 cents per litre. This takes effect immediately from 30 March 2022.
Relief for First Home Buyers
The Home Guarantee Scheme will expand by it being made available to 50,000 individuals/couples each year. This scheme helps those eligible clear perhaps the main hurdle in entering the housing market – saving for a deposit. Under the scheme, eligible first home buyers can with the assistance of government obtain a loan to build a new home or purchase a newly-built home with a deposit of as little as 5%.