Last week the Government announced changes to the property market in an attempt to make the first home market more accessible.
- An extension of the bright-line test.
- A proposal to remove interest deductibility for residential rentals.
- An increase in the caps for the First Home Loan under the First Home Grants scheme.
The Bright-line test
Among a range of measures to curb property speculation and support first-home buyers, the Government announced on Tuesday 23/3/21 that it intends to double the bright-line test from five to ten years.
The 10 year bright-line test will apply to residential properties purchased on or after 27th March 2021.
Removal of interest deductibility
Currently rental property owners can claim the interest paid on loans relating to those rental properties as an expense, thereby reducing their tax.
New legislation restricting interest deductions will apply from 1st October 2021.
An increase on caps for First home loan grants
If you’re a first-home buyer, from 1 April the income caps for the First Home Loan and the house price caps under the First Home Grants scheme will increase