Connect with us


Tax Cuts to Boost Homebuyer Borrowing Power in Federal Budget Update



Times News Global Featured Image

A significant increase in borrowing capacity for homebuyers is on the horizon following the unveiling of the latest federal budget update, which includes substantial tax cuts set to take effect from July 1. The revisions to the stage 3 tax cuts will see Australian taxpayers, regardless of income, benefiting from the changes. Notably, the adjustments are expected to provide relief and support to individuals grappling with the challenges of escalating living costs.

Under the modified tax brackets, every taxpayer earning above the tax-free threshold of $18,200 will receive a tax cut, with the exact amount varying depending on their income level. A typical wage earner, on an average of $73,000 annually, can anticipate a tax cut of $1504, while those earning $45,000, $100,000, and $150,000 stand to save $804, $2179, and $3729 per year, respectively.

James Algar, a broker at Mortgage Choice, highlighted that the tax cuts would translate into increased borrowing capacities for homebuyers, estimating that an individual with a $100,000 income could see their borrowing power rise by approximately $25,000. Similarly, those earning $150,000 might be able to borrow an additional $37,000. The adjustments are poised to offer crucial financial support to individuals navigating the current housing affordability crisis.

Discussing the implications of the tax cuts on the property market, Paul Ryan, a senior economist at PropTrack, noted that the boost in borrowing capacities would particularly benefit first-home buyers and investors. The adjustments are expected to provide a slight tailwind for the property market, with a more pronounced impact foreseen in the lower end of the market.

Furthermore, the federal budget update includes significant changes to the indexation rate on student loan balances under programs such as the Higher Education Loan Program (HELP), VET Student Loan, and Australian Apprenticeship Support Loan. The revised indexation rate, capped at the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI), will lead to a reduction in student debts for over three million beneficiaries.

Rachel Adams

Times News Global is a dynamic online news portal dedicated to providing comprehensive and up-to-date news coverage across various domains including politics, business, entertainment, sports, security, features, opinions, environment, education, technology and global. affairs. Our commitment lies in sharing news that is based on factual accuracy, credibility, verifiability, authority and depth of research. We pride ourselves on being a distinctive media organization, guided by the principles enshrined in Article 19 of the Universal Declaration of Human Rights. Made up of a team of ordinary people driven by an unwavering dedication to uncovering the truth, we publish news without bias or intimidation.

Recent Posts