What the July 1 changes will mean for your hip pocket

What the July 1 changes will mean for your hip pocket

It’s July 1, that time of the year that brings changes to everything from minimum wage to your super. Here’s what you need to know.

Open banking

Heralding a new era in open banking, the big four banks now have to share data with accredited fintech companies via the Consumer Data Right Register. The change will allow Australians to share their data with third parties, such as comparison websites and personal finance apps.

“The new framework puts control of data into the hands of the consumer, and will enable them to more easily identify and consume financial services that best meet their needs,” says Adam Beavis from Amazon Web Services.

Main residence exemption

In the new tax year, Australians living overseas will no longer be able to claim the capital gains tax exemption on the sale of new homes.

“Their decisions are limited,” warns James Ridley from Atlas Wealth Management.

“They either hold until they have returned back to Australia and sell as an ordinary Australian tax resident or if they are forced to sell due to personal circumstances they will have to seek tax planning advice prior to the sale so they can have an opportunity to reduce their overall CGT burden at a non-residents tax rate.”

Superannuation

Those struggling financially from the impact of COVID-19 are now allowed to take a second $10,000 out of their superannuation. And it’s already proved popular. So popular, in fact, that the ATO website servers crashed due to an influx of requests.

“Say you take $20,000 out of your super, you’ll miss out on years of compounding growth,” says certified financial planner Randall Stout.

“If you really need it, it could be smarter to take a smaller amount and see how you go.”

Minimum wage

The minimum wage has been increased to $753.80 a week, or $19.84 an hour, up from $740.80 a week.

Working from home

The ATO has introduced a temporary shortcut method for calculating the additional running expenses you incur as a result of working from home due to COVID-19.

You’ll now be able to claim 80 cents for each hour you work from home, and covers all deductible running expenses. This applies for each person in the household, so couples and those in a share house can claim this new rate.

The shortcut method is an alternative, however, not a substitute. You can still use one of the existing methods to calculate your running expenses.

“With more people working from home, working reduced hours or unfortunately not working at all, we expect to see claims for laundry expenses or travel expenses decline this year,” says ATO assistant commissioner Karen Foat.

“If you aren’t travelling for work, you can’t claim travel expenses. If you aren’t wearing your work uniform, you can’t claim laundry expenses. It’s still important to meet the three golden rules: you must have spent the money and not have been reimbursed, it must relate directly to earning your income, and you must have a record to prove it.”

Childcare

Free childcare is set to wrap up on July 12, after it was initially rolled out on April 6. That means a return to the childcare subsidy for families still deemed to be affected by coronavirus.

Car registration fees

Some states will escape the typical annual increase in the car registration fees.

Fees in the Australian Capital Territory, Victoria, Tasmania and the Northern Territory will have the fee increases put on ice, South Australian registration fees will receive $200 off (for a typical household with 1.8 cars), but Queensland will see a rise of 1.8%.

Luxury car tax

The level of luxury car tax for electric vehicles and fuel efficient cars has been increased to $77,565, up from $75,526, while the level for fuel guzzling petrol and diesel cars has also been relaxed from $67,525 to $68,740.

From Money Magazine

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These articles provide you with factual information only, and are not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. The information in these articles is believed to be reliable at the time of distribution, but EFS does not warrant its completeness or accuracy. Neither EFS nor its related bodies, nor their directors, employees or agents accept any responsibility for loss or liability which may arise from accessing or reliance on any of the information contained in these articles. For information about whether a loan may be suitable for you, call EFS on 02 8041 6746.