HAPPY NEW FINANCIAL YEAR!
The Australian Government has announced tax cuts that may put more money in your pocket. Starting from 1st July, the following changes will take effect:
- The 19% tax rate will be reduced to 16%
- The 32.5% tax rate will be reduced to 30%
- The 37% tax threshold will increase from $120,000 to $135,000
- The 45% tax threshold will increase from $180,000 to $190,000
What Does This Mean for You?
These tax cuts translate into more money in your pocket, potentially increasing your borrowing capacity. Let’s look at some examples:
If you earn $120,000, you would have paid $31,867 in tax for the 2023-2024 financial year. With the new tax cuts, you will only pay $29,188.
This not only means more money in your pocket, but it could also potentially increase your borrowing capacity. Here are a couple of scenarios:
Example 1: Jenny is a single Australian with no dependents earning $120,000 per year. Her borrowing capacity could increase by just over $27,000!
Example 2: Ben and Karen are married with two kids, Jack and Paul. Their combined gross income is $280,000. Their borrowing capacity could increase by just over $75,000!
Making the Most of Your Tax Savings
These tax cuts offer opportunities for you to make financial progress. Here are a few ways you can make the most of them:
- Pay Down Your Loan Faster: Use the extra money to pay down your loan faster and potentially shave years off it.
- Save for Your Dream Home: Save the extra money to add to your deposit for your dream home.
- Reduce Bad Debt: Use the additional funds to reduce your bad debt, improving your financial health.
No matter how you choose to use these tax cuts, the start of the financial year is a great time to set some financial goals. We would love to help! Contact our friends at MORTGAGE & FINANCIAL SOLUTIONS AUSTRALIA, and they will send you a SMART Financial Goals worksheet to assist you in planning for the 2024/2025 year.
If you’re curious about how much extra you can borrow, don’t hesitate to contact our friends at MFSA.
Embrace the new financial year with confidence and make the most of these exciting tax changes!
Disclaimer: The above article is not intended as financial advice. To fully understand how these tax cuts affect you, please consult a finance professional. The examples provided are based on a 6.328% interest rate, and your circumstances may reflect a different rate. Please note this is not an offer for credit, and is not intended as financial advice. This information does not take into consideration your personal circumstances and is a guide only.
Australian Credit Licence 365592 . Westvalley Corp ACN trading as MFSA
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