Government changes to housing policies that might affect you
Updated: Jan 28
Property investors please take note
Today’s press release states the following changes are of immediate effect:
Any investment property with a settlement date after this Saturday (27 March 2021) will be hit by new rules.
Brightline increases from 5 years to 10 years
This means you need to consider your rental property a longer-term investment or face paying tax on any capital gain made from a sale before 10 years of owning it.
Full removal of interest deductibility from investment properties.
This means investors can’t offset the cost of the interest they pay on their mortgage against their tax bill. This will take effect immediately for any property bought after 26 March 2021 and be phased in over 4 years for already owned properties.
First Home Grant changes
And some first home buyers will also be impacted:
The First Home Grant* income caps have been lifted from $85,000 to $95,000 for single buyers, and from $130,000 to $150,000 for two or more buyers.
The cap on the value of the house those eligible for this grant are able to buy has also been lifted by up to $100,000 in some parts of the country.
*The First Home Grant is assistance of up to $5000 to buy an existing property or up to $10,000 for a new property for qualifying purchasers. The First Home Loan allows qualifying first home buyers to apply for a mortgage with only a 5 per cent deposit. Most other home buyers need at least a 20 per cent deposit to get a mortgage.