Insights – AustAsia Group

Exchange Traded Funds (ETFs)

AAG AustAsia — Thu, 21 May 2026 02:20:42 +0000

What is an ETF?

An Exchange Traded Fund (ETF) is a single investment you buy and sell on the ASX that holds a basket of assets — such as many different shares, bonds, or commodities. Rather than buying a single company’s stock, an ETF gives you instant diversification, regular distributions (often quarterly), and easy liquidity — you can sell units on-market for cash whenever you need to.

Think of it this way: instead of betting on one horse, an ETF lets you back the entire field in a chosen race — whether it’s a specific theme such as technology companies, high-dividend Australian stocks, copper miners, or the energy transition sector, or an index.

Why Use ETFs?

Foundation for the portfolio — reduces reliance on picking individual speculative shares.
Income stream potential via periodic distributions (like rent, but from shares) — often with franking credits attached for Australian ETFs.
Flexibility — invest part now and keep some cash aside; sell ETF units later if cash is needed.
You don’t have to invest all cash at once — stage your purchases over time to reduce the impact of short-term market volatility.

How Do ETFs Work?

You purchase units in the ETF through your broker or online trading platform — just like buying shares on the ASX.
The ETF manager pools money from all investors and uses it to buy a basket of underlying assets aligned with the fund’s strategy.
The value of your ETF units rises and falls with the performance of those underlying assets.
Most ETFs distribute income (dividends or interest) periodically to investors — often quarterly.
You can buy or sell your ETF units on the ASX at any time during trading hours.

Key Benefits of ETFs

Instant Diversification
A single ETF can give you exposure to dozens — sometimes hundreds — of companies across a sector or theme. This significantly reduces your risk compared to owning individual stocks.

Low Cost
Management fees (the MER) typically range from 0.20% to 0.70% per year — far lower than actively managed funds or the hidden costs of frequent share trading.

Income & Franking Credits
Many Australian equity ETFs — such as VHY — distribute franked dividends, which may reduce the tax you pay depending on your personal tax position. This makes them particularly attractive for income-focused investors or those in lower tax brackets.

Simplicity & Accessibility
You do not need to be an expert analyst to invest in a sector you believe in. ETFs do the research and stock selection for you, and can be purchased with as little as a few hundred dollars.

Liquidity & Flexibility
Because ETFs trade on the ASX during market hours, you can buy or sell them at any time. You also don’t need to invest everything at once — you can start with a portion and add more over time, keeping some cash aside for known near-term needs.

Transparency
Most ETFs publicly disclose their holdings regularly, so you always know what you own. There are no hidden surprises.

Tax Efficiency
ETFs are generally more tax-efficient than actively traded portfolios. Because the fund does not frequently buy and sell its underlying assets, capital gains distributions tend to be lower. ETFs held within a superannuation environment can also attract concessional tax treatment.

ETFs vs. Direct Share Picking

The table below summarises how ETFs compare to selecting individual shares:

ETFs	Direct Share Picking
Instant diversification across many companies	Concentrated risk in individual stocks
Management Fees: Lower cost — typically 0.3%–0.7% p.a. management fee. Brokerage costs per trade as set by broker or online trading platform.	Brokerage costs per trade as set by your broker.
No need to research individual companies	Requires significant time and expertise.
Trades on the ASX like a normal share	Also trades on ASX.
Exposure to a sector theme, not a single bet	Higher upside — but also higher downside risk
Professionally managed index or active strategy	Entirely self-directed — you carry all decisions

You can find more here in comparison:

Summary Comparison Table

ETF Types to Consider

Choose the type that suits your goals and risk profile:

High-Dividend Australian Equity ETFs — Focus on income (often franked) from large local companies; useful as an income anchor.
Broad Market ‘Core’ Equity Or Index ETFs (AU or Global) — Diversified growth across many sectors and countries; good as a core holding to balance single-stock risk.
Thematic ETFs — Target specific long-term structural trends such as energy transition metals, copper miners, robotics & AI, and battery technology: higher risk but strong long-term tailwinds.
Bond / Cash ETFs — Provide defensiveness and stability; distributions reflect interest rates; handy for near-term spending needs or more conservative investors.

A Simple Starting Mix (illustrative only)

Core: a broad AU or global equity ETF for diversification.
Income sleeve: a high-dividend AU ETF for franked income
Thematic growth: one or two thematic ETFs aligned with long-term trends you believe in.
Cash buffer: keep some funds uninvested (or in defensive ETFs) for known near-term needs.

Important Considerations

All investments carry risk. The value of your ETF units can go down as well as up, and past performance is not a guarantee of future returns.
Thematic ETFs carry sector concentration risk — if the sector underperforms, the ETF will too.
Currency risk may apply if the ETF holds international assets not hedged back to Australian dollars.
Liquidity in smaller or more niche ETFs may be lower than in broad market funds.

Next Steps

Reach out to our investment team.

Please feel free to reach out to discuss this further. We look forward to helping you take advantage of these investment opportunities in a considered and tax-effective way.

The post Exchange Traded Funds (ETFs) appeared first on AustAsia Group.

Federal Budget 2026-27

AAG AustAsia — Mon, 18 May 2026 09:10:58 +0000

Importantly, no major new tax changes were announced for superannuation in this Budget.

However, several previously legislated changes commence on 1 July 2026, including the new Division 296 tax and Payday Super.

On 12 May 2026, Treasurer Jim Chalmers delivered the 2026-27 Federal Budget — described in the Budget speech as “the most important and ambitious Budget in decades.” Delivered against an uncertain global backdrop, including the ongoing Middle East conflict and persistent cost-of-living pressures, the Budget pairs sustained spending on health, housing, defence and resilience with the most significant package of personal and investment tax reforms in a generation.

A word of caution before acting

As we have advised clients before, it is important not to make decisions yet — these are government policy announcements. Given the Opposition Reply to the Budget, the current commentary and a great deal of conjecture around these announcements, it is unlikely that all of the measures will be passed in their current form. There is a likelihood that some of these will be passed, although, as has happened in the past, those measures could subsequently be unwound in the event that the current Labor Government is not returned to power.

It should also be noted that the attack on negative gearing was first commenced by the former Labor Treasurer Paul Keating in 1985-86, and was unwound two years later when Labor went to the polls — they were going to lose the election if it had remained. Likewise, the original introduction of the capital gains tax, which applied from 20 September 1985, was severely changed. It is unfortunate that the current Treasurer appears adamant to continue making the same mistakes of his mentor, Paul Keating, and that he wants to force Australia into having a “recession we have to have” — as Paul Keating famously stated in the late 1980s and early 1990s, which led to the recession of 1991.

The headline story is tax reform. The Government has announced sweeping changes to the capital gains tax (CGT) regime, negative gearing on established residential properties, and the taxation of discretionary trusts — alongside continued personal income tax cuts, a new $250 Working Australians Tax Offset, and a $1,000 instant tax deduction. For businesses, the $20,000 instant asset write-off becomes permanent, the loss carry-back rules return, and the R&D Tax Incentive is being recalibrated.
The Budget delivers an underlying cash deficit of $31.5 billion for 2026-27, forecast to widen slightly to $34.4 billion before improving to a deficit of $25.3 billion by 2029-30. Compared to the December MYEFO, the budget position over the forward estimates has improved by $44.9 billion.

At a glance

The five priorities of Budget 2026-27

Cost-of-living relief — extended energy and fuel support, cheaper medicines, expanded urgent care clinics.
Fuel supply and security — a $14.8 billion fuel resilience package and a domestic gas reservation from 1 July 2027.
Productivity and resilience — R&D, AI adoption, skills, regulatory streamlining and supply-chain investment.
Tax reform — CGT, negative gearing, discretionary trusts and personal tax overhaul.

Housing and infrastructure — $5.9 billion extra for the Help to Buy scheme, $2 billion for housing-enabling infrastructure and major rail projects.

Spending highlights

Headline spending commitments in the Budget include:

$53b

for defence over the next decade —
reaching 3% of GDP by 2033

$39.1b

to support R&D through education,
grants, science, defence and research

$25b

additional funding for public hospitals
under the National Health Reform Agreement

$14.8b

Fuel Resilience package to secure
Australia's energy supply

$5.9b

to list more medicines on the
Pharmaceutical Benefits Scheme

$5.9b

additional for the Homes for First
Home Buyers (Help to Buy) program

$3.8b

for Victoria's Suburban Rail Loop East

$3.7b

aged care package — including up to
5,000 additional beds per year

$2.9b

to more than halve fuel excise and
zero the heavy-vehicle road user
charge for three months from 1 April 2026

$2.2b

to expand Services Australia,
including frontline staff and myGov upgrades

$2b

for infrastructure to support the build
and supply of new homes

$1.8b

to make the Medicare Urgent Care
Clinics permanent

$53b

for defence over the next decade —
reaching 3% of GDP by 2033

$39.1b

to support R&D through education,
grants, science, defence and research

$25b

additional funding for public hospitals
under the National Health Reform Agreement

$14.8b

Fuel Resilience package to secure
Australia's energy supply

$5.9b

to list more medicines on the
Pharmaceutical Benefits Scheme

$5.9b

additional for the Homes for First
Home Buyers (Help to Buy) program

$3.8b

for Victoria's Suburban Rail Loop East

$3.7b

aged care package — including up to
5,000 additional beds per year

$2.9b

to more than halve fuel excise and
zero the heavy-vehicle road user
charge for three months from 1 April 2026

$2.2b

to expand Services Australia,
including frontline staff and myGov upgrades

$2b

for infrastructure to support the build
and supply of new homes

$1.8b

to make the Medicare Urgent Care
Clinics permanent

All figures are estimates. Source: Commonwealth of Australia, Budget Paper No. 2, 2026-27.

Personal taxation

Legislated tax cuts continue

The legislated personal income tax cuts continue to roll through. From 1 July 2026, the 16% marginal rate applying to income between $18,201 and $45,000 reduces to 15%. From 1 July 2027, it will be further reduced to 14%.

These cuts deliver tax savings of up to $268 in 2026-27 and up to $536 from 2027-28, compared with current settings.

Thresholds ($)	2024-25 & 2025-26	2026-27	2027-28
0 – 18,200	Tax free	Tax free	Tax free
18,201 – 45,000	16%	15%	14%
45,001 – 135,000	30%	30%	30%
135,001 – 190,000	37%	37%	37%
>190,000	45%	45%	45%

$1,000 instant tax deduction

From 1 July 2026, Australian tax residents who earn assessable income from work will be able to claim an automatic $1,000 deduction without needing to itemise or substantiate work-related expenses.

Taxpayers with work-related deductions above $1,000 can choose to claim the actual amount in the usual way (with substantiation).
Charitable donations, union and professional association fees, income protection premiums, and other non-work deductions remain claimable separately, in addition to the $1,000.
There is no requirement to keep receipts for the $1,000 standard deduction.

Working Australians Tax Offset (WATO)

A new permanent $250 Working Australians Tax Offset will apply from the 2027-28 income year. It is available to individuals deriving income from salary and wages, or as a sole trader, and is automatically delivered once a tax return is lodged.

The WATO is a non-refundable offset — it can reduce tax payable to nil but cannot generate a refund. Combined with the legislated tax cuts, it lifts the effective tax-free threshold for working Australians to approximately $19,985 (or up to $24,985 for workers also eligible for the Low Income Tax Offset).

Capital gains tax — major reform

From 1 July 2027, the 50% CGT discount will be replaced by cost-base indexation, and a 30% minimum tax rate will apply to net capital gains for individuals, trusts and partners in partnerships.

This is one of the most significant changes to capital gains taxation since the introduction of the 50% discount in 1999.

Key features

Cost-based indexation — taxpayers will be able to index the cost base of CGT assets held for more than 12 months using a CPI methodology similar to the indexation rules that applied before 1999.
30% minimum tax — a 30% minimum tax rate will apply to net (indexed) capital gains made by individuals, trusts and partnerships.
Applies to all CGT assets held by individuals, trusts and partnerships — including pre-CGT (pre-20 September 1985) assets.
Companies are not affected — companies are not currently eligible for the 50% CGT discount.
Superannuation funds are not affected — complying super funds (including SMSFs) continue to access the 1/3rd CGT discount on assets held more than 12 months.
Income-support payment recipients are exempt from the 30% minimum tax (including Age Pensioners and part-pensioners).

Transitional rules

Assets purchased and sold before 1 July 2027 — no change. The 50% discount continues to apply.
Assets owned before 1 July 2027 and sold after — the 50% discount applies to gains accrued up to 30 June 2027; indexation and the 30% minimum tax apply to gains from 1 July 2027.
Assets purchased on or after 1 July 2027 — entirely under the new arrangements.
Pre-CGT assets — gains accrued before 1 July 2027 remain exempt.

Taxpayers will need to determine the market value of CGT assets as at 1 July 2027 — either by obtaining a valuation or by using an ATO-provided apportionment formula based on the asset’s holding period and growth rate.

New residential housing — investor choice

Investors in new build residential properties can choose between:

the existing 50% CGT discount; or
cost-based indexation combined with the 30% minimum tax.

New build properties include dwellings constructed on vacant land, or where existing properties are demolished and replaced with a greater number of dwellings. Knock-down rebuilds or renovations that do not increase supply do not qualify, nor do dwellings already occupied or previously sold.

Negative gearing — restricted to new builds

From 7.30 pm AEST on 12 May 2026, losses from established residential investment properties will no longer be deductible against an individual’s broader taxable income.

How the new rules work

From 1 July 2027, rental losses on established residential investment properties acquired after 7.30 pm AEST 12 May 2026 will be quarantined.
Quarantined losses can only be offset against rental income or capital gains derived from residential properties. Any excess is carried forward and applied against future residential property income or gains.
Where there are unused losses on a property’s sale, FirstTech’s view is that those losses are included in the property’s cost base, reducing the gross capital gain on disposal.

Properties not affected

Eligible new builds (as defined for the CGT changes above).
Established residential properties acquired before 7.30 pm AEST on 12 May 2026 — until the point of disposal.
Properties in widely-held trusts (for example, most managed investment trusts).
Properties held in superannuation funds (including SMSFs).
Established properties purchased between 12 May 2026 and 30 June 2027 can be negatively geared up to 30 June 2027, but not thereafter (transitional measure).

30% minimum tax on discretionary trusts

From 1 July 2028, a minimum 30% tax rate will apply to the taxable income of discretionary trusts.

This is a fundamental change to the way discretionary trusts (commonly referred to as family trusts) have been taxed.

How it will operate

The trustee will pay 30% tax on the trust’s taxable income.
Beneficiaries (other than corporate beneficiaries) will receive a non-refundable tax credit for the tax paid by the trustee.
Trustees receiving franked dividends will be required to use franking credits to pay the minimum tax.
Corporate beneficiaries will not receive non-refundable credits to prevent their conversion into refundable franking credits.

Excluded trusts and income

The minimum tax will not apply to:

fixed and widely-held trusts (including fixed testamentary trusts)
complying superannuation funds
special disability trusts, deceased estates and charitable trusts

Excluded income types include primary production income, certain income of vulnerable minors, amounts subject to non-resident withholding tax, and income from discretionary testamentary trusts in existence at the announcement date.

Rollover relief

To assist small businesses and other taxpayers who wish to restructure out of a discretionary trust (for example, into a company or a fixed trust), rollover relief will be available for three years from 1 July 2027.

Business taxation

$20,000 instant asset write-off made permanent

From 1 July 2026, small business entities with aggregated annual turnover under $10 million will permanently access an immediate income tax deduction for the acquisition of depreciable capital assets valued up to $20,000.

The provision that prevents small business entities from re-entering the simplified depreciation regime for 5 years if they have previously opted out will remain suspended until 30 June 2027.

Loss carry-back returns

For income years commencing on or after 1 July 2026, companies with aggregated global annual turnover under $1 billion will be able to carry back a tax loss and offset it against income tax paid up to two years earlier.

Applies to revenue (income tax) losses only.
The company’s franking account balance limits the amount of the carry-back.
This is a permanent reintroduction — the rules were last seen during the COVID period.

Loss refundability for small start-ups

From income years commencing on or after 1 July 2028, start-up companies in their first two years of operation with aggregated annual turnover under $10 million will be able to convert tax losses into a refundable tax offset.

The offset is limited to the value of fringe benefits tax and withholding tax on wages paid to Australian employees in the loss year.

PAYG instalments — monthly option

From 1 July 2027, small and medium businesses will have the option to:

report and pay PAYG instalments monthly rather than quarterly; and
use an ATO-approved calculation embedded in accounting software to calculate and vary instalments.

Research & Development Tax Incentive — recalibrated

Significant reforms apply from 1 July 2028:

Refundable offset threshold raised from $20m to $50m aggregated turnover.
Refundability tied to entity age — only young SMEs (under 10 years old) will access the refundable offset.
Offset rate increases for all entities — for SMEs, the rate becomes 23 percentage points above the corporate tax rate (effective 48% for SMEs).
For large companies, the offset rate rises from 8.5 to 13 percentage points above the corporate tax rate, and jumps to 21 percentage points when R&D intensity exceeds 1.5%.
Removal of eligibility for supporting R&D activities — only core R&D expenditure qualifies.
Maximum expenditure threshold raised from $150m to $200m.
Minimum spend requirement raised from $20,000 to $50,000.

Venture capital — expanded thresholds

From 1 July 2027, the following Venture Capital Limited Partnership (VCLP) and Early Stage VCLP thresholds increase:

Threshold	Current	From 1 July 2027
VCLP — max investee asset value at investment	$250m	$480m
ESVCLP — max investee asset value at investment	$50m	$80m
ESVCLP — cap on investee total assets for full tax exemption	$250m	$420m
ESVCLP — maximum fund size	$200m	$270m

The Early Stage Venture Capital Investor (ESVCI) program closes to new applications from Budget night (12 May 2026).

Foreign resident CGT regime — strengthened

Building on the 2024-25 Budget announcements, draft legislation has been introduced to:

Clarify and broaden the definition of real property (with retrospective effect from 12 December 2006) for foreign resident CGT under Division 855.
Amend the point-in-time principal asset test to a 365-day testing period.
Require foreign residents disposing of shares and other membership interests valued at $50m or more to notify the ATO before executing the transaction.

A 50% CGT discount will apply to disposals on or before 30 June 2030 for foreign residents investing in Australian renewable energy assets.

Corporate reporting relief — larger threshold for proprietary companies

Thresholds for determining whether a proprietary company is ‘large’ and therefore required to lodge an audited annual financial report, directors’ report and sustainability report are being increased:

Consolidated revenue threshold: $50m → $100m
Consolidated gross assets threshold: $25m → $50m

International tax — Pillar Two side-by-side package

Consistent with other OECD/G20 jurisdictions, Pillar Two will be amended to implement the side-by-side package, applying from 1 January 2026.

Superannuation

Division 296 — extra tax on balances above $3 million

From 1 July 2026, Division 296 imposes additional tax on the earnings of individuals with total super balances (TSBs) above $3 million. First assessments will be issued after 30 June 2027 based on the 2026-27 income year.

How Division 296 will operate

An additional 15% tax on earnings attributable to the portion of an individual’s TSB above $3 million.
A further 10% tax (totalling 25% extra) on earnings attributable to the portion of TSB above $10 million.
Assessed to the individual, not the super fund. The individual can elect to pay personally or have the amount released from super.
The rules apply to realised capital gains accrued from 1 July 2026 onwards, with mechanics varying by fund type.
Special provisions cover indexation of the thresholds, treatment on death, and transitional relief in the 2026-27 year.

Payday Super begins 1 July 2026

From 1 July 2026, employers will generally be required to pay Super Guarantee (SG) contributions at the same time as salary and wages, rather than quarterly.

Supporting changes include amendments to the earnings base used to calculate SG and the SG charge, as well as changes to how the Maximum Contributions Base is calculated and applied.

Fringe Benefits Tax — Electric vehicle discount

The Government is transitioning the FBT exemption for electric vehicles (EVs) towards a more sustainable long-term setting. Each phase will be grandfathered.

Phase	Period	Treatment
Phase 1	Until 31 March 2027	Existing 100% FBT exemption continues for eligible EVs
Phase 2	1 April 2027 – 31 March 2029	EVs ≤ $75,000: 100% FBT discount continues; EVs > $75,000 (up to LCT threshold): 25% FBT discount via 15% statutory formula rate
Phase 3	From 1 April 2029	Permanent 25% FBT discount for all EVs valued up to the fuel-efficient LCT threshold (currently $91,387) via 15% statutory formula rate

An eligible vehicle retains the treatment that applied when the arrangement commenced.

Households, health and social support

Cost-of-living measures

Fuel excise was more than halved, and the heavy-vehicle road user charge was reduced to zero for three months from 1 April 2026 — part of a $2.9 billion package.
$1 billion Economic Resilience Program — interest-free loans through the National Reconstruction Fund for manufacturing and logistics businesses impacted by the Middle East conflict.
$5.9 billion in additional spending on the Pharmaceutical Benefits Scheme to list more medicines.
Medicare Urgent Care Clinics made permanent — $1.8 billion over five years.

Housing

$5.9 billion extra for the Help to Buy program for first home buyers.
$2 billion for housing-enabling infrastructure.
$500 million to streamline environmental approvals to support construction.
Extension of the ban on foreign purchases of established dwellings.

Aged care and home care

$3.7 billion aged care package — up to 5,000 additional residential aged care beds per year, principally for those with limited financial means.
New capital subsidies for aged care providers and changes to the Accommodation Supplement.
Up to 20 additional Specialist Dementia Care units.
Fully funded personal care services (showering, dressing, incontinence aids) under the Support at Home program.
Faster access to Support at Home places, improved assessments and end-of-life pathways.

Private Health Insurance Rebate — age-based uplift removed

From 1 April 2027, the age-based uplift to the Private Health Insurance Rebate is being removed, saving $3.0 billion over four years. Under current rules, policyholders aged 65–69 and 70+ receive higher rebate percentages than younger policyholders at the same income level. Those savings are being redirected to aged care.

Social Security and Services Australia

$2.2 billion for Services Australia over five years — frontline staff, cyber security uplift, and improvements to myGov.
Pension Supplement to overseas recipients — full rate extended from 6 to 12 weeks during temporary absences; ceased after 12 weeks of temporary absence or upon permanent departure—estimated savings of $218 million over five years.
Increased Medicare levy low-income thresholds from 1 July 2025.

Trade, industry and innovation

Trade and customs

Abolition of a further 497 nuisance tariffs from 1 July 2026, taking the cumulative total abolished to approximately 1,000 — estimated to reduce compliance costs by $157m per year.
$7.6 million to expand the Australian Trusted Trader program.
$7.5 billion Fuel and Fertiliser Security Facility — supply chain commitments with Japan, Korea, Singapore, Malaysia and Brunei.
20% domestic gas reservation for LNG exporters from 1 July 2027, alongside the removal of the Australian Domestic Gas Security Mechanism.
$55 million Transport Resilience and Capacity Kickstart pilot — incentivising rail and sea freight.

Skills, AI and digital adoption

$85.2 million to accelerate skills assessments for migrant trades workers.
Australian Apprenticeships Incentive System reformed from 1 January 2027 — employer incentives prioritised for small and medium employers and Group Training Organisations.
Round 3 of the Digital Solutions program launches on 1 July 2026 with a new AI and emerging technology focus.
Up to $70 million in AI Accelerator grants via the Cooperative Research Centres program.

Science and innovation

$1.5 billion invested in CSIRO, the National Measurement Institute and the Square Kilometre Array.
$508.5 million to increase disbursements from the Medical Research Future Fund.

Establishment of a new National Resilience and Science Council to coordinate public innovation investment.

ATO activity and compliance

The Australian Taxation Office will receive an additional $86.3 million over four years from 1 July 2026, and $9.7 million per year ongoing from 2030-31, to expand its compliance activities.

Targeted compliance areas include:

Phase 2 of the Counter Fraud Strategy — modernising fraud prevention and detection across the tax and super system, including fraud by tax agents and intermediaries.
Targeted exceptions to tax secrecy and enhanced information-gathering powers.
Two-year R&D Tax Incentive compliance project.

The Budget also includes funding to strengthen governance and ASIC supervision of managed investment schemes ($17.8 million over four years), and to explore extending the Consumer Data Right to enable taxpayers to share ATO-held data with their advisers.

The economy

The 2026-27 Budget is framed against an uncertain global backdrop. For households and businesses alike, the outlook remains challenging: interest rates, inflation and unemployment — the metrics that most acutely shape economic confidence — are all moving in the wrong direction.

The Government delivered an underlying cash deficit of $31.5 billion for 2026-27, forecast to widen slightly to $34.4 billion before narrowing to $25.3 billion by 2029-30. The budget position over the forward estimates has improved by $44.9 billion compared with the December MYEFO, supported by:

modest revenue upgrades from higher commodity prices and elevated inflation; and
$63.8 billion in announced savings, including the removal of the age-based Private Health Insurance Rebate uplift and changes to the Pension Supplement for overseas recipients.

Global growth remains subdued. The Middle East conflict has triggered supply-chain dislocation in fuel, fertiliser and freight, prompting the new Fuel Resilience package and Economic Resilience Program. Trade tensions and Australia’s exposure to the China-United States trade relationship continue to weigh on the outlook for trade-exposed sectors.

Industry response

The Budget’s tax reform agenda has attracted strong commentary across the accounting and advisory profession.

CPA Australia has described the changes as a “tax grab” that “punishes aspiration and deters investment”, warning that the combination of CGT and discretionary trust changes effectively creates a “minimum tax on aspiration” for those investing or building a business.

Grant Thornton has highlighted the volume of measures — particularly the welcome increases to the venture capital thresholds — but notes that the increased complexity around the CGT transitional rules will require careful planning by 1 July 2027.

Colonial First State (FirstTech) notes that the 30% minimum tax on capital gains means the long-standing strategy of realising gains in years of reduced income (such as after retirement) may no longer be as effective — unless the client also qualifies for an income support payment.

What this means for you

The 2026-27 Budget contains genuinely significant changes that will affect tax planning, investment, business structuring and retirement strategies. Many of the most important measures do not commence until 1 July 2027 or later, which provides time to plan, but also creates important review points.

Key considerations between now and 1 July 2027

Property investors — review the timing of any planned acquisitions or disposals of established residential property, and consider whether new build properties may better suit your strategy going forward.
Investors holding CGT assets — consider the impact of the move from a 50% discount to indexation with a 30% minimum tax, and ensure asset values at 1 July 2027 can be substantiated.
Family trust beneficiaries — review distribution patterns in light of the 30% minimum trust tax from 1 July 2028. Some clients may benefit from a restructure (with rollover relief available for three years from 1 July 2027).
Business owners — model the impact of the permanent $20,000 instant asset write-off, the return of loss carry-back, and the revised R&D Tax Incentive thresholds.
High-balance super members — finalise planning for Division 296 — including reviewing investment strategy, drawdown patterns and the choice between paying personally or releasing the liability from super.
Employers — ensure your payroll and super systems are ready for Payday Super on 1 July 2026 and the new $1,000 standard deduction for employees from 1 July 2026.
EV salary packaging — clients considering an EV novated lease should be aware of the FBT phase-down from 1 April 2027.

Boost your Super Retirement Savings Downsizer Contribution

AAG AustAsia — Tue, 17 Mar 2026 04:29:50 +0000

If you are aged 55 or over;
Looking to sell your primary residence that you have owned for more than ten years.

You may be able to contribute up to $300,000 per person from the sale proceeds into your superannuation under the downsizer contribution rules.

This strategy allows eligible Australians to boost their retirement savings without impacting their standard contribution caps — even if their super balance already exceeds the usual transfer balance limits.

Importantly, the property:

Must be located in Australia
Must have been owned by you or your spouse for at least 10 years
Must qualify for a full or partial CGT main residence exemption

You do not need to be living in the property at the time of sale, provided it has qualified as your main residence at some point during ownership.

Benefits of the contribution:

Contribute Outside Normal Caps

Downsizer contributions do not count towards concessional or non-concessional contribution caps.

No Work Test Required

There is no requirement to meet the work test.

Available Even With High Super Balances

Unlike other contribution types, downsizer contributions are not restricted by your total super balance.

Significant Contribution Potential

You can contribute up to $300,000 each (up to $600,000 per couple), limited to the gross sale proceeds.

Retirement Planning Flexibility

This strategy can assist with tax planning, wealth transfer, and the improvement of retirement income streams.

Key Eligibility Requirements

To qualify, you must:

Be 55 years or older at the time of contribution
Have owned the property (or your spouse has) for at least 10 years prior to sale
Sell a property located in Australia
Ensure the sale qualifies for at least a partial main residence CGT exemption
Make the contribution within 90 days of receiving the sale proceeds
Provide your super fund with the approved ATO Downsizer Contribution Form before or at the time of contribution
Have not previously made a downsizer contribution

Common Misconceptions

Does the property need to be fully CGT exempt?
No. A full exemption is not required. A partial main residence exemption may still qualify.

Do I need to be living in the property at settlement?
No. The property does not need to be your principal residence at the time of sale.

Can only the owner contribute?
Not necessarily. A spouse who is not on title may still be eligible, provided all other conditions are satisfied.

Can I contribute more than the sale proceeds?
No. The contribution is capped at the lesser of $300,000 per person or the gross sale proceeds.

Can I contribute part now and top it up later?
No.
Downsizer contributions can be made only once per person and must generally be made within 90 days of receiving the sale proceeds.

If you choose to contribute less than your maximum eligible amount (for example, $100,000 instead of $300,000), you cannot later return and contribute the remaining amount once the time limit has passed.

You may split the contribution into multiple payments, but they must all be made within the allowed timeframe.

Because this is a once-in-a-lifetime opportunity, it is important to consider the full contribution amount before proceeding.

Important Considerations

Downsizer contributions are not tax-deductible
Once contributed, funds remain subject to super preservation rules
Contributions may impact Age Pension eligibility
Vacant land generally does not qualify
Pre-CGT properties have specific eligibility considerations

Professional advice is strongly recommended before proceeding.

Some examples from the Australian Tax Office

(Assuming all other eligibility requirements are met — including age 55+, 10-year ownership and contribution within 90 days of settlement.)

Contribution of maximum amount

A couple, George and Jane, sell their home for $800,000.
Each spouse can contribute up to $300,000 to super (a total of $600,000), as this does not exceed the sale proceeds.

Contributions cannot exceed the total sale price

A couple, Bruce and Betty, sell their home for $400,000.
The maximum contribution they can make in total cannot exceed $400,000 in total.
They may split this however they choose — for example, $200,000 each, or $300,000 for Betty and $100,000 for Bruce.

When a property is owned by one spouse

A couple, John and Fatima, sell their home for $600,000.
Only John is on the title.
Provided both meet all eligibility requirements, both John and Fatima can make a downsizer contribution of up to $300,000 each.

Selling part of the ownership interest

Robert and Wendy jointly own their home and decide to sell a 50% ownership interest for $250,000.
As they each dispose of 25% of the property and receive $125,000 each, they may each make a downsizer contribution of up to $125,000 (being the amount of capital proceeds they personally received).
Downsizer contributions can only be made once per person from the disposal of an ownership interest in a qualifying home.

Sale proceeds less than $300,000 per person

Maria sells her home for $250,000.
Even though the maximum cap is $300,000, she can only contribute up to $250,000, as contributions cannot exceed the gross sale proceeds.

For more information, visit the ATO’s website.

Please get in touch with us if you would like advice concerning the above or if you have any questions.

The post Boost your Super Retirement Savings
Downsizer Contribution appeared first on AustAsia Group.

The ATO Is Focusing On Holiday Homes: What Owners Need To Know

AAG AustAsia — Mon, 09 Feb 2026 22:27:46 +0000

We have been helping many clients recently consider whether to buy a holiday home or a property within a complex that allows 3 months of owner use, as well as other investments with a personal and investment flavour.

The ATO has recently updated its guidance on how it interprets the law in this regard.

The ATO has recently signalled a much stronger focus on holiday homes and residential properties that are used partly for private holidays and partly for rental income. This change affects many people who own coastal homes, farm stays, Airbnb-style properties or seasonal rentals.

The ATO’s concern is simple. Many taxpayers claim significant deductions for a property that, in practice, is mainly used by the owner, family or friends for private enjoyment. As a result, the ATO has released new draft guidance to clarify how these properties will be treated from now on.

This includes:

TR 2025/D1 – a draft taxation ruling setting out the general rules for rental property income and deductions
PCG 2025/D6 – a practical compliance guideline explaining how owners must apportion expenses for properties with both private and income-producing use
PCG 2025/D7 – a guideline explaining when a holiday home may be considered a “leisure facility” under section 26-50, which can deny major deductions

These drafts represent the ATO’s modern approach to holiday homes and signal how compliance activity will be targeted.

When Is a Property Treated as a Holiday Home?

A holiday home is generally a residential property that is sometimes rented out commercially, but is also used for private holidays. The ATO is particularly concerned where:

The property is rarely genuinely available for rent
it is listed at inflated prices that discourage bookings
School holidays and peak seasons are blocked out for family use
Family and friends stay free or at heavily discounted rates

In these situations, the ATO is likely to question whether the property is truly held for income-producing purposes.

Apportioning Deductions: New Expectations from TR 2025/D1 and PCG 2025/D6

Where a property has mixed use, income and expenses must be divided between private days and income-producing days. The draft guidance confirms:

A time-based method is generally expected. Owners must calculate the number of days the property was genuinely available for commercial rent and the number of days it was actually rented to paying guests.
If only part of the property is rented, the ATO expects both time and area apportionment.
Owners can adopt a different approach, but they must demonstrate that their method is fair and reasonable.

This means deductions can no longer be claimed in full. They must accurately reflect the reality of how the property is used.

When a Holiday Home Becomes a “Leisure Facility”

The most significant change appears in PCG 2025/D7, which aligns with sections 26-50 of the tax law. The ATO may treat the property as a leisure facility if it is not mainly held or used to produce assessable income.

If that happens, many major deductions will no longer be allowed, such as:

interest on loans
council rates
land tax
repairs and maintenance
insurance
some utilities

Only expenses that directly relate to earning income, such as cleaning after guests or advertising fees, may still be deductible. This can drastically change the tax outcome for an owner.

The ATO’s Risk Zones: Green, Amber and Red

To help owners understand how their situation might be assessed, the ATO has introduced a traffic-light model.

Green zone – low risk
The property is genuinely operated as a rental. It is competitively priced, consistently available, and has strong occupancy in peak periods. Private use is limited. The ATO generally does not intend to review these cases.

Amber zone – moderate risk
There is a mix of motives. The property is rented, but the owner frequently blocks out desirable dates, uses it personally in peak periods or charges “mates rates”. These cases may be reviewed.

Red zone – high risk
The property appears to be primarily a private holiday house. It may be rarely available for bookings, significantly overpriced, or largely used by the owner or family. These cases are most likely to trigger an ATO review and possible denial of deductions.

Common behaviours the ATO is now watching for (red-zone indicators)

Claiming 100 per cent of interest and holding costs despite long periods of private use
Blocking out school holidays and peak seasons, but still treating the property as an investment.
Listing the property at unrealistically high prices so that no one books
Allowing friends or family to stay free or cheaply while still claiming all expenses
Not keeping records of private stays and periods of genuine availability
Setting unreasonable conditions, such as long minimum stays in off-peak periods

Transitional Relief

The ATO has acknowledged that its position on holiday homes has not previously been as clearly expressed. For that reason, it has indicated that it will not devote compliance resources to reviewing expenses incurred before 1 July 2026, provided:

The property was acquired before 12 November 2025, and
it is genuinely a rental property, even if privately used at times.

After this transition period, the new guidance will take full effect.

What This Means for Holiday Home Owners

For clients who own, or are thinking of buying, a holiday home, several practical implications arise:

Actual use now determines the deductions. If the property is mostly for private enjoyment, the tax outcomes can change significantly.
Record-keeping is more important than ever. Owners should maintain booking calendars, advertising records, market-rate evidence and full details of private stays.
Occupancy, availability and pricing will be examined closely. Blocking out peak seasons or charging unrealistic rates may place the property in the red zone.
Loan interest and major holding costs may be denied altogether if the property is treated as a leisure facility.
Owners need to make deliberate choices about whether they want the property to operate as a genuine income-producing rental or remain primarily a private holiday home.

We are here to help.

If you own a holiday home or are considering investing in one, reach out to us. We can help you to navigate the tax implications.

The post The ATO Is Focusing On Holiday Homes:
What Owners Need To Know appeared first on AustAsia Group.

Novated Lease: Is It the Right Choice for You?

AAG AustAsia — Wed, 21 Jan 2026 09:04:28 +0000

Novated leases are widely advertised as a convenient way to finance a vehicle through salary packaging, often with the promise of tax savings. In the right circumstances, they can be a practical option, but they are not a one-size-fits-all solution.

What is a novated lease?

A novated lease is a vehicle finance arrangement linked to your employment.
Payments are made via your payroll, and running costs (such as fuel, servicing, insurance, and registration) can be packaged into one regular amount.
Depending on the structure, part of the cost may be paid from pre-tax income, which is where the potential tax benefit may come from.

Why do people choose them

Many people like novated leases because they simplify budgeting — one regular payment can cover most vehicle costs, and expenses are spread out rather than arriving as large one-off bills. For higher-income earners who expect to remain with their employer and prefer changing cars every few years, this structure can be convenient.

A quick note on “tax savings”

The tax benefit can be real, but it depends on your personal situation. Many examples and calculators assume higher income brackets, certain kilometres, and specific running-cost assumptions. If those assumptions don’t match your circumstances, the savings may be less than expected. It’s important to review the total cost, not just the headline tax message.

What to check before deciding

Total cost
Novated lease payments can include finance costs, administration/management fees, and bundled running costs. The monthly figure can look attractive, but it’s the total cost over the full term that matters.

What’s inside the “bundle”
Bundled costs are convenient, but the assumptions (kilometres, maintenance, and insurance pricing) can vary. Some packages are great value, others are simply convenient.

What happens if your job changes
Because novated leases run through your employer, it’s important to understand what happens if you change roles, change employers, or move to an employer that doesn’t support salary packaging.

When a Novated Lease Can Be a Great Fit

Higher income (where the tax impact is more meaningful)
Stable employment
A preference for newer cars every few years
A strong preference for convenience and predictable costs

How to Decide

Compare a novated lease with a standard car loan (where you choose your own insurance and servicing). With our Tax Team’s help, we’ll run a side-by-side, after-tax comparison and recommend the option that best fits your situation, in the most tax-effective way. Contact us to get started.

The post Novated Lease:
Is It the Right Choice for You? appeared first on AustAsia Group.

Payday super: the details

AAG AustAsia — Wed, 10 Dec 2025 01:00:08 +0000

‘Payday super’ will overhaul how superannuation guarantee is administered.

From 1 July 2026, employers will be obligated to pay superannuation guarantee (SG) on behalf of their employees on the same day as salary and wages, rather than the current quarterly payment sequence.

This was announced in the 2023-24 Federal Budget.
The legislation has now progressed through Parliament and is in its final stages, with core elements of the regime confirmed. Employers should monitor updates throughout 2025 as further ATO guidance is released.

The Australian Taxation Office (ATO) has a factsheet that explains what this would look like and the upcoming obligations on employers.

The purpose of this is to reduce the unpaid superannuation owed to employees.
A Treasury report on its impact estimates that a 25-year-old median-income earner who is currently paid superannuation quarterly and wages fortnightly could be around 1.5% better off at retirement if they switched to the earlier contribution and payment model.

The estimate is that this initiative could bring in up to $3.4 billion of unpaid super.

Under the proposal:

Employers will be required to pay SG contributions so they are received by the employee’s superannuation fund within seven business days of payday, aligning contributions with each pay cycle rather than quarterly.
A “payday” refers to when a qualifying earnings payment is made to an employee (updated wording to match legislative terminology)
There are two key exceptions:
1. For new employees and only for their first two weeks of employment
2. For payments made outside a regular pay cycle (e.g., bonuses, commissions, correction runs), which may follow alternative timing rules defined by the ATO.

They envisage that when employers report via the Single Touch Payroll (STP) system, this will assist with some of the workload.

However, this will impact employers’ cash flow, as instead of paying the superannuation quarterly, they will need to have the funds available at each pay cycle to remit the contributions.

It is important to note that paying super late or submitting late returns can result in penalties.

Correct super guarantee (SG) payments involve four steps:

You must determine if a worker is “for super purposes” an Employer or a Contractor. This is a complex area.
You then apply the correct super guarantee percentage.
You have the correct earnings base. It has historically been calculated on Ordinary Time Earnings (OTE); however, draft legislation introduces the new concept of Qualifying Earnings (QE) to create consistency and reduce grey areas. This change should be incorporated into payroll systems as final definitions are confirmed.
The SG is paid on time within the statutory timeframe.

What happens if SG is paid late?

If superannuation is paid incorrectly, the employer is obligated to lodge a superannuation guarantee charge (SGC), and penalties may be imposed.

The SGC is calculated on the super shortfall plus interest (now aligned with the General Interest Charge) and an administration charge of (for example) $20 for each employee for each quarter.

If the super is not paid on time, additional penalties apply.

The penalties can be pretty severe:

Shortfall amount
Interest on the amount
GIC (General Interest Charge)
Administration charges
Administrative uplift penalties up to 60% of the shortfall
Additional penalties of up to 50% are imposed if the SGC remains unpaid for 28 days after assessment

Under the current law, if you pay super late, it would not be tax deductible (including interest and penalties).

Therefore, paying super late can make it quite expensive.

Most employers pay the super for the March quarter early in April, and the same for the June quarter.

The ATO will also have expanded visibility under Payday Super, using STP‑linked data to detect late or missing payments far earlier than under the previous quarterly arrangement.

We will keep you updated on this area as final details are released.

The post Payday super: the details appeared first on AustAsia Group.

Division 296 Changes to the Proposed Legislation

AAG AustAsia — Wed, 15 Oct 2025 05:12:22 +0000

Following on from our previous article in June 2025, the government has announced it will implement practical changes to its proposed tax changes for people with large super balances (over $3 million), which will now take effect from 1 July 2026.

What’s changing?

Previously, the proposed tax calculations for high-balance super accounts were based on changes in your total super balance, which could include unrealised gains (value increases that haven’t actually been sold or received as income). This sometimes meant you could be taxed on “paper profits.” The threshold for the new tax ($3 million) was also not proposed to be indexed, meaning more people would be impacted by the tax over time.

Under the new rules:

Tax will only apply to “realised earnings”—that is, actual income your super fund has received, such as interest, dividends, rent, and realised capital gains from assets that have been sold.
If your total super balance is above $3 million, the ATO will contact your super fund(s) for your share of these realised earnings.
The ATO will then apply the new higher tax rates (15% for balances between $3 million and $10 million, and 25% for balances above $10 million) to your share of these earnings.
The $3m and $10m thresholds will also be indexed in line with the Consumer Price Index.

These tax rates will apply in addition to the fund’s concessional tax rate of 15 per cent on taxable income.

Why is this better?

This approach is considered fairer, as impacted super fund members will only be taxed on income their fund has actually earned—not on paper profits that may never be realised. It also brings these tax rules more in line with how other investment income is taxed, and also addresses the problem of more people becoming subject to the tax over time due to ‘bracket creep’.

What do you need to do?

If your super balance never exceeds $3 million, these changes won’t affect you. If you’re above the threshold or likely to exceed it, we’ll work with you to understand your position and plan for any potential tax impacts from 2026 onwards. If you have questions about how these changes might affect your retirement planning, get in touch with us. We are always here to help.

The post Division 296
Changes to the Proposed Legislation appeared first on AustAsia Group.

Don’t Let a Simple Oversight Cost You Thousands — Check Your Super Today

AAG AustAsia — Thu, 09 Oct 2025 07:54:09 +0000

Every year, many Australians receive their superannuation annual statements and leave them unread. That silence could be very costly in the long run.

Recent media coverage warns that neglecting your super — even in small ways — may erode tens or even hundreds of thousands of dollars from your retirement savings.

What’s the risk?

Ignoring your annual statement
Many people never actually open or review the statement their super fund sends. This means missing errors, unnoticed fees, or underperformance.

Paying too much in fees across multiple accounts
It’s surprisingly common to have more than one super account. Each account may charge fees, which cumulatively erode your balance.

Sticking with a low-performing fund or default investment option
Even a 1% underperformance over decades can translate to significant differences in final balances. Many are still invested in the default option and don’t revisit their allocation as their needs change.

Switching to cash after market drops (“locking in losses”)
It’s a natural instinct when markets are volatile, but shifting funds to cash after a fall can mean missing out on the rebound.

Delaying extra contributions
Relying only on employer contributions may not get you to the retirement you hope for. Small voluntary or salary-sacrificed contributions can make a meaningful difference.

Failing to act promptly on notices or changes
If your super fund sends notices about your investment options, fees, or insurance, delaying review or action can lead to negative consequences.

Switching funds carelessly (risking tax or admin issues)
If you make a personal, tax-deductible contribution, then immediately roll over to another fund before your deduction is confirmed, you may lose eligibility for that tax deduction.

Why this matters

Over a working life, super is often one of your largest financial assets. These kinds of oversights don’t just cost a few dollars — they can mean tens or hundreds of thousands in lost value. Also, super funds and regulators are increasingly scrutinizing fund practices, so more diligence is required than ever.

What you should do now

Open your most recent super statement.
Check the fees being charged, investment return performance, and whether all expected contributions have arrived.
Find out whether you have multiple super accounts; if so, consider consolidating them.
Review your investment option and see whether it’s still aligned with your goals.
Make (or continue) voluntary contributions if your budget allows.
Before rolling over or switching funds, confirm any deduction claims or tax-related issues with your fund first.

If anything seems off, ask questions

How AAG can help you

At AAG, we view this as part of our role to help you protect and grow your wealth for retirement. Here’s what we offer:

A super review service to audit your current fund: fees, performance, contribution tracking, and suitability
Help with consolidating multiple super accounts
Guidance on optimal investment mix based on your stage of life, goals and risk tolerance
Advice on salary sacrifice strategies, extra contributions, and tax implications
Assistance with fund switching or rollovers, ensuring you don’t fall into common traps
Ongoing monitoring and reviews to ensure your super remains on track

If you’d like us to review your super setup or conduct a fund review for you or your team, please don’t hesitate to get in touch with us. We’d be happy to help ensure that your super is working as hard as it can for you.

Further reading relating to optimising your Super:

Article One

Article Two

The post Don’t Let a Simple Oversight Cost You Thousands — Check Your Super Today appeared first on AustAsia Group.

Superannuation Guarantee Changes: Due dates and considerations for Employers and Employees

AAG AustAsia — Thu, 25 Sep 2025 09:17:00 +0000

With another quarter’s super obligation coming for the period to the end of September 2025, it is timely to remind clients of the changes to Super.

On 1 July 2025, the superannuation guarantee rate increased to 12%, marking the final stage of a series of previously legislated increases.

Employers currently need to make superannuation guarantee (SG) contributions for their employees by 28 days after the end of each quarter. That is:

Quarter 1 – 1 July to 30 September is due to be received by the employee’s fund by 28 October
Quarter 2 – 1 October to 31 December is due to be received by the employee’s fund by 28 January
Quarter 3 – 1 January to 31 March is due to be received by the employee’s fund by 28 April and
Quarter 4 – 1 April to 30 June is due to be received by the employee’s fund by 28 July.

There is an extra day’s allowance when these dates fall on a public holiday. This does not include weekends, though, so if the due date falls on a weekend, you must take this into account, as you don’t receive the extra day’s allowance.

To comply with these rules, the contribution must be in the employee’s superannuation fund on or before this date, unless the employer is using the ATO small business superannuation clearing house (SBSCH). As we have been advising business clients for some time, we recommend that you arrange to pay your staff super at least 7 days before the due date.

The ATO has been applying considerable compliance resources in this space in recent years, which can have an impact on both employees and employers.

Employers

To be eligible to claim a tax deduction on SG contributions, the quarterly amount must be in the employee’s super account on or before the above quarterly due dates. The only exception to this is where the employer is using the ATO SBSCH. In that case, a contribution is considered made provided the SBSCH has received it on or before the due date.

Employers using commercial clearing houses should be mindful of turnaround times. Commercial clearing houses collect and distribute employee contributions and may be linked to accounting/payroll software or provided by some superannuation platforms. Anecdotally, it seems that turnaround times for some clearing houses could be up to 14 days, so it is recommended that employers allow sufficient time before the quarterly deadlines when processing their employee SG contributions.

If these deadlines are missed (yes, even by a day!), that will trigger a superannuation guarantee charge (SGC) requirement, which will result in a loss of the tax deduction and other penalties.

The SGC requirements are outlined in the ATO link below:

The super guarantee charge | Australian Taxation Office

Employers have the option to make SG payments more frequently than quarterly, and they will need to become accustomed to this if the proposed ‘payday’ superannuation reforms become law. This change is proposed to commence from 1 July 2026 and would require SG to be paid at the same frequency as salary or wages. There is some discussion on the payday super proposal at this link (noting that this is not yet law). The SBSCH will now close. Employers using this service should consider transitioning to a commercial clearing house. Please let us know if you would like assistance with this transition.

We have already been in discussion with several clients to change their frequency to at least monthly, which aligns the PAYG / Instalment Activity Statement requirements, payroll tax and now Super. If you are able to, iron out any issues with paying more frequently now (to monthly), it will start to prepare you for Pay Day Super as set out above.

Employees

It is recommended that you regularly check your superannuation fund statements and reconcile employer contributions to the amounts listed on your pay slips.

Where SG contributions are not received on time (or at all!), employees are encouraged to discuss this first with their employer. Should this not result in a satisfactory conclusion, employees can consider bringing this to the attention of the ATO.

There is some helpful discussion on this process at the following link.

If you have any queries or concerns, please get in touch with our Client Care team, and we will be happy to assist.

The post Superannuation Guarantee Changes:
Due dates and considerations
for Employers and Employees appeared first on AustAsia Group.

A win for those carrying student debt

AAG AustAsia — Fri, 19 Sep 2025 00:36:24 +0000

In support of young Australians and in response to the rising cost of living, the Australian Government has passed legislation to reduce student loan debt by 20% and change the way that loan repayments are determined. This should help students significantly more than the advice from outside of Parliament – cut down on the smashed avo.

20% reduction in student debt

The reduction is expected to benefit more than 3 million Australians and remove over $16 billion in outstanding debt. The 20% reduction will be automatically applied to anyone with the following student loans:

HELP loans (eg, HECS-HELP, FEE-HELP, STARTUP-HELP, SA-HELP, OS-HELP)
VET Student loans
Australian Apprenticeship Support Loans
Student Start-up Loans
Student Financial Supplement Scheme.

The reduction will be based on the loan balance at 1 June 2025, before indexation was applied. Indexation will only apply to the reduced balance. The ATO will apply the reduction automatically on a retrospective basis and will adjust the indexation that is applied. No action is needed from those with a student loan balance, and the Government has indicated that you will be notified once the reduction has been applied.

If you had a HELP debt showing on your ATO account on 1 April 2025, but you paid the debt off after 1 June 2025, then the reduction will normally trigger a credit to your HELP account. If you don’t have any other outstanding tax or other debts to the Commonwealth, then the credit should be refunded to you.

The HELP debt estimator is a valuable tool for estimating the reduction amount. Please reach out if you need any help in working out eligibility.

Changes to repayments

The Government has also modified the way that HELP and student loan repayments operate, primarily by increasing the amount that individuals can earn before they need to make repayments.

The minimum repayment threshold for the 2025-26 year is being increased from $56,156 to $67,000. The threshold was $54,435 for the 2024-25 year.

Under the new repayment system, an individual will only need to make a compulsory repayment for the 2025-26 year if their income is above $67,000. The repayments will be calculated only against the portion of income that is above $67,000.

Repayments will still be made through the tax system and will typically be determined when tax returns are lodged with the ATO.

For many people, the change in the rules will mean they have more disposable income in the short term, but it will take longer to pay off student loans. The main exception to this will be when an individual chooses to make voluntary repayments.

Extra Repayments

Several clients have asked us if they should make additional repayments against HELP debt, particularly those parents assisting adult children to obtain a home loan. Our view is not to do so at this time, until the reduction has been processed. It appears from the current position that if your HELP debt has been paid off before 1 April 2025, you will have no benefit in relation to the reduction.
If you have any queries or concerns, please get in touch with our Client Care team, and we will be happy to assist.

The post A win for those carrying student debt appeared first on AustAsia Group.

Insights – AustAsia Group

Exchange Traded Funds (ETFs)

What is an ETF?

Why Use ETFs?

How Do ETFs Work?

Key Benefits of ETFs

ETFs vs. Direct Share Picking

ETF Types to Consider

Important Considerations

Next Steps

Federal Budget 2026-27

A word of caution before acting

At a glance

The five priorities of Budget 2026-27

Spending highlights

Legislated tax cuts continue

$1,000 instant tax deduction

Working Australians Tax Offset (WATO)

Capital gains tax — major reform

From 1 July 2027, the 50% CGT discount will be replaced by cost-base indexation, and a 30% minimum tax rate will apply to net capital gains for individuals, trusts and partners in partnerships.

Key features

Transitional rules

New residential housing — investor choice

Negative gearing — restricted to new builds

How the new rules work

Properties not affected

30% minimum tax on discretionary trusts

How it will operate

Excluded trusts and income

Rollover relief

$20,000 instant asset write-off made permanent

Loss carry-back returns

Loss refundability for small start-ups

PAYG instalments — monthly option

Research & Development Tax Incentive — recalibrated

Venture capital — expanded thresholds

Foreign resident CGT regime — strengthened

Corporate reporting relief — larger threshold for proprietary companies

International tax — Pillar Two side-by-side package

Division 296 — extra tax on balances above $3 million

How Division 296 will operate

Payday Super begins 1 July 2026

Cost-of-living measures

Housing

Aged care and home care

Private Health Insurance Rebate — age-based uplift removed

Social Security and Services Australia

Trade and customs

Skills, AI and digital adoption

Science and innovation

What this means for you

Key considerations between now and 1 July 2027

We’re here to help

Boost your Super Retirement Savings Downsizer Contribution

Benefits of the contribution:

Contribute Outside Normal Caps

No Work Test Required

Available Even With High Super Balances

Significant Contribution Potential

Retirement Planning Flexibility

Key Eligibility Requirements

Common Misconceptions

Important Considerations

We’re Here to Help

Some examples from the Australian Tax Office

Contribution of maximum amount

Contributions cannot exceed the total sale price

When a property is owned by one spouse

Selling part of the ownership interest

Sale proceeds less than $300,000 per person

The ATO Is Focusing On Holiday Homes: What Owners Need To Know

We have been helping many clients recently consider whether to buy a holiday home or a property within a complex that allows 3 months of owner use, as well as other investments with a personal and investment flavour.

The ATO has recently updated its guidance on how it interprets the law in this regard.

When Is a Property Treated as a Holiday Home?

Apportioning Deductions: New Expectations from TR 2025/D1 and PCG 2025/D6

When a Holiday Home Becomes a “Leisure Facility”

The ATO’s Risk Zones: Green, Amber and Red

Transitional Relief

What This Means for Holiday Home Owners

We are here to help.