eNews - June 2017
In a move that was widely predicted, the Reserve Bank of Australia decided to keep the official cash rate on hold at 1.5% for the 10th month in a row.
While it was expected that rates remain steady for now, CoreLogic head of research Tim Lawless said that financial markets are leaning towards a cut in the future. He said “One of the key barriers to rate cuts – the hot housing markets of Sydney and Melbourne – has shown signs of slowing”.
Last month’s Federal Budget introduced new measures to make it easier for first home buyers to save a deposit, by allowing them to salary-sacrifice up to $30,000 into super and benefit from a reduced tax rate of 15%.
The government is tightening some of the rules relating to negative gearing claims. From July 1, all travel deductions to inspect, maintain or collect rent for an investment property will be disallowed. Plant and equipment depreciation deductions will be limited to outlays actually incurred by investors.
The government introduced measures to increase housing supply, such as releasing Commonwealth land for housing development. New financial incentives were also announced to encourage over 65s to downsize, with the government making it easier for them to contribute up to $300,000 from the sale of their family home into super.
Until next time.