GOVERNMENT PROPERTY ANNOUNCEMENTS
A significant suite of policy changes has been announced, intended to make the property market fairer for first home buyers.
The main proposed changes include:
Extending the bright-line test to 10 years – this means that any gain made on the sale of any residential home bought after 27 March 2021 that is not your main home will be taxable on sale if sold under 10 years
However, newly built homes will be excluded from the new extension of the bright-line test, instead can use a 5 year bright-line test
Income caps and regional caps have changed for the First Home Grant & Loan schemes
No deductibility for interest for property bought after 27 March 2021
You can still claim interest as a deductible expense on existing residential rentals, however, this will be phased out over the next five years down to 0%
Exclusions to the bright-line rule
When you sell residential property there are three situations when the bright-line property rule does not apply.
The property is your main home (the rule is you can only have one main home, therefore, a family bach will not be part of the exclusion)
You inherited the property.
You're the executor or administrator of a deceased estate.