Budget 2016 –PRP Analysis
The Federal Budget announced last night (03/05/2016) by Treasurer, Scott Morrison was relatively silent in regards to new announcements in the property sector.
The Treasurer, in his explanatory remarks, did however, comment on the strength of the property sector being vital to the ongoing health of the economy.
There were no announcements in regards to Capital Gains Tax, nor Negative Gearing, both topical discussions that have sparked much media interest in pre election debates.
In specific announcements:
• There will a continued focus on the Commonwealth Smart Cities Plan, which forms the centerpiece of the Governments Infrastructure, spends. Funding has been announced for major transit routes including the M80 Ring Road, Ipswich Motorway in Queensland and the Monash Freeway in Melbourne.
• There is also infrastructure budget of $115 m of preparatory work for the proposed Badgery’s Creek Airport as well as for the Perth Freight Link and $593 m of Infrastructure spend, over 3 years, for the proposed high speed rail link between Melbourne and Brisbane.
• The Governments introduction of $1.6m cap on transfers of Superannuation to the tax free retirement phase may well see investment plans of self funded retirees changing. Preston Rowe Paterson believes, given the relatively strong position of the property market in relation to other investment vehicles, some of this money may well find its way into the property sector thus further stimulating the commercial property sector.
Previous announcements including measures regarding Foreign Investors in relation to Capital Gains Tax all commence on July 1 and form part of the future estimates in the budget.