Budget recap

It was announced yesterday that the big four banks plus Macquarie will incur a 0.06% annual levy that will apply to certain sources of funding. In short, if it passes through Parliament the banks are going to get taxed a little bit more and it may affect their clients. An increase in mortgage rates and other lending is likely to ensure that the banks remain profitable. The good news is the Australian Competition and Consumer Commission (ACCC) would undertake a residential pricing inquiry for the next year. Effectively the ACCC will be able to force banks to explain changes to fees, rates and so on.

First Home Buyers are slight winners after the Budget. It has been announced that they will be able to use voluntary contributions
(salary sacrifice) to their superannuation to save from a deposit. The withdrawals will be taxed at lower rate and up to $15,000 per a year or $30,000 all up can be contributed.

Also potentially affected by this budget are foreign investors. They will be slugged with an extra charge for properties left vacant and there will also be an increase in their application fees. This has been viewed as somewhat of a win for buyers struggling to break into the East Coast market as it could take the heat off.