As we enter the new financial year, several new tax changes will be coming into effect as of 1 July 2022.

Low and Middle Income Tax Offset (LMITO)

The Low and Middle Income Tax Offset will stop in the 2022-23 financial year. The LMITO tax subsidy was introduced under the Coalition Government in 2018. It was introduced as stage one in the three-part plan to reform the tax system and was designed to give low and middle income earners immediate tax relief.

LMITO increased for the 2021-22 income year, with the offset limit jumping by $420 to a maximum of $1,500 for taxable incomes below $126,000.

Superannuation

As of 1 July, the $450 a month super guarantee threshold will be removed. This means employees will be eligible for super contributions from their employer no matter how much they earn. Removing the threshold means there is less chance small super balances will be eroded by high fees and insurance premiums.

The super guarantee rate is also set to increase, from 10% to 10.5%.

First Home Super Saver Scheme

Starting 1 July , the amount as part of the First Home Super Saver Scheme that can be saved will increase from $30,000 to $50,000. This is due to the rising price of houses.

Downsizing

People looking to sell the family home and use the sale proceeds to boost their super will be able to leverage the post-tax contribution of up to $300,000 per person at the age of 60 rather than 65, at the start of July.

The work test will also be removed for those under 75 years of age who make or receive personal contributions and salary-sacrificed contributions, which will make it easier for older people to top up their super when nearing retirement.

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Armada Accountants Pty Ltd – ABN 79 009 298 542, Armada Financial Planning Pty Ltd – Corporate Authorised Representatives of Armada Wealth Management Pty Ltd AFSL 535978, Armada Lending Pty Ltd – ABN 20 603 067 983 – Authorised Corporate Credit Representative (470054) of BLSSA Pty Ltd (ACL 391237), Armada Audit Services Pty Ltd – ABN 39 151 015 002, Armada Business Services Pty Ltd ABN 29 008 762 481 are members of the Armada Group. Each member of the Armada Group is a separate legal entity in its own right and is not in partnership with any other members of the Armada Group. Liability limited by a scheme approved under Professional Standards Legislation.


Armada Accountants & Advisors acknowledges and pays respect to the past, present and future Traditional Owners and Elders of this nation and the continuation of cultural and spiritual practices of Aboriginal and Torres Strait Islander peoples. Armada also acknowledges the Traditional Owners of the land where our Perth and Port Hedland offices are located, the Whadjuk Noongar People (Perth) and Kariyarra People (Port Hedland).

Copyright © 2022 Armada Accountants & Advisors.
ALL RIGHTS RESERVED 

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