Wins for small businesses and the retention of key tax arrangements that benefit housing investment are the big positives for real estate in the 2015-16 Federal Budget. 

The Real Estate Institute of Australia (REIA) haswelcomed the Federal Budget, announced Tuesday, with Chief Executive Officer Amanda Lynch congratulating Treasurer Joe Hockey on listening to the real estate sector. 

“The Government is to be commended for ensuring stability within the sector in continuing the current tax arrangements as they relate to both Capital Gains Tax and negative gearing. 

“With other sectors of the economy slowing, housing will play an increasingly important role and it is pleasing to see the Government has not tampered with tax arrangements that have been proven to help stimulate housing investment in Australia,” said Ms Lynch. 

Ms Lynch said if negative gearing had been abolished, it would have resulted in a dwindling supply of properties for rent, escalating rent prices and reduced opportunities for low to middle income earning Australians to create wealth for self-funded retirement. 

The wins for small businesses included tax cuts, immediate deductibility for professional expenses, capital gains tax roll over relief for changes to entity structure, changes to the fringe benefits tax system for work related electronic devices and expanding accelerated depreciation. 

“We strongly welcome the small business package that will give business owners meaningful incentives to hire, invest in equipment and importantly grow their livelihood,” Ms Lynch said. 

REIA also commended the Federal Government for listening to the real estate industry on the issue of foreign investment. 

“We welcome the commitment of $67.2 million over four years to improve compliance and strengthen enforcement. We have long argued the Foreign Investment Review Board was caught asleep at the wheel. Compliance is now in the hands of the Australian Tax Office (ATO) to the funding needed to ensure the ATO has some teeth in enforcing the new regulations,” Ms Lynch said. 

Infrastructure was another positive out of the 2015-16 Federal Budget, with the Australian Government committing to providing Western Australia with $499.1 million towards economic infrastructure projects in WA for 2014-15. 

The Government has also pledged to establish a five billion dollar Northern Australia Infrastructure Facility that will be available for major infrastructure projects such as ports and railways in WA, the Northern Territory and Queensland. 

View the 2015-16 Federal Budget.