There are some big changes happening to the superannuation system effective from 1 July 2017 and the legislation has been passed to implement the 2016/17 Budget superannuation measures (commonly called the superannuation reform package). The following is a summary of most of the changes:

• From 1 July 2017, there will be a $1.6m transfer balance cap on the total amount of accumulated superannuation an individual can transfer into the tax-free retirement phase. Subsequent earnings on balances in the retirement phase will not be capped or restricted. An excess transfer balance tax is payable if the cap is exceeded.
• From 1 July 2017, the threshold at which high-income earners are liable for Division 293 tax will be lowered from $300,000 to $250,000.
• From 1 July 2017, the annual cap on concessional contributions will be reduced to $25,000 for all individuals (currently $30,000 for individuals under age 50, and $35,000 for those age 50 and over).
• From 1 July 2018, individuals with account balances of $500,000 or less will be allowed to make “catch up” superannuation contributions by allowing them to roll over their unused concessional caps from up to five previous financial years.
• From 1 July 2017, the annual non-concessional contributions cap will be reduced to $100,000 (currently $180,000) and individuals with a superannuation balance of more than $1.6m will no longer be eligible to make non-concessional contributions. As is currently the case, individuals under age 65 will be eligible to bring forward three years of non-concessional contributions.
• From 1 July 2017, a Low Income Superannuation Tax Offset will be available to individuals who earn an adjusted taxable income of $37,000 or less for their superannuation contributions (the tax offset will replace the Low Income Superannuation Contribution which ceases to apply after 30 June 2017).
• From 1 July 2017, the requirement that an individual must earn less than 10% of their income from their employment related activities to be able to deduct a personal contribution to superannuation will be removed. All individuals under the age of 65, and those aged 65 to 74 who meet the work test, may claim a tax deduction for personal contributions to eligible superannuation funds up to the concessional contributions cap.
• From 1 July 2017, eligibility for the spouse contributions tax offset will be extended to individuals whose spouses earn up to $40,000.
• From 1 July 2017, the tax exemption on earnings in the retirement phase will be extended to products such as deferred lifetime annuities and group self-annuitisation products.
• From 1 July 2017, the tax exempt status of income from assets supporting transition to retirement income streams (TRIS) will be removed. These earnings will be taxed concessionally at 15%. Individuals will also no longer be allowed to treat certain superannuation income stream payments as a lump sum for tax purposes.

 

• From 1 July 2017, the anti-detriment provision which allows superannuation funds to claim a tax deduction for a portion of the death benefits paid to eligible dependants will be removed.
• From 1 July 2017, the range of existing processes for the release of amounts from individuals’ superannuation using a release authority will be simplified and consolidated, as part of streamlining the administration of the Division 293 tax regime.

​See the following links for more information:
https://www.ato.gov.au/Super/Self-managed-super-funds/Super-changes-for-self-managed-super-funds/
http://www.iknow.cch.com.au/topic/tlp1707/overview/superannuation-changes

A contract can become an instalment contract for many reasons including:

    a)   the deposit is more than 10%; or
    b)   the deposit is stated to be non-refundable in all circumstances; or
    c)   the buyer is given a rebate off the purchase price which makes the deposit more than 10% of the rebated purchase price; or
    d)   the Buyer is required to pay money to the Seller (in addition to the deposit if the deposit is equivalent to 10% of the purchase                 price) before receiving a transfer and the amount payable under the contract exceeds market value for what is provided in                     exchange.  For example, a rent to buy contract may require the payment of instalments which exceed the market rent that would           otherwise be payable.

The effect of the contract being an instalment contract is:

1. if the Buyer defaults in the payment of any instalment or part of the purchase price (other than a deposit), the Seller cannot terminate the contract until 30 days after having served a notice giving the Buyer 30 days within which to make payment. If the Buyer chooses to make payment within the said 30 day period (including any default interest payable under the contract), then the Seller cannot terminate the contract as a consequence of the Buyer’s initial non-payment. This means that where the default is in the payment of the balance purchase price, the Buyer can effectively obtain another 30 days in which to settle the transaction;
2. the Seller is prohibited from re-selling or re-mortgaging the property before settlement; and
3. the Seller may be required to comply with the National Credit Code, including the requirements for pre-contractual disclosure, ongoing notices and certain pre-requisites to enforcement.

​Therefore, we suggest the Buyer always instruct his/her solicitor to investigate the possibility that the Buyer’s contract is an instalment contract.

As you may knew that The Queensland First Home Owners’ Grant has been boosted to $20,000, but only until 30 June 2017. The Queensland First Home Owners’ Grant is a state government initiative to help first home owners to get their new first home sooner. Depending on the date of your contract, you’ll get $15,000 or $20,000 towards buying or building your new house, unit or townhouse (valued at less than $750,000). You can even buy off the plan or choose to build yourself. It’s a great opportunity to buy or build a new home in our great state.

Your Eligibility – 

• You must be an Australian citizen or permanent resident (or applying with someone who is);
• You or your spouse must not have previously owned property in Australia;
• You must be at least 18 years of age;
• You must be buying or building a brand new home, valued under $750,000

Source: ​Queensland Government First Home Owners’ Grant