Tax Cuts Encourage Investment
Stage 3 tax cuts coupled with a drop in interest rates could be enough to entice investors back to the property market.
Industry experts said the two financial measures combined would lead to better borrowing capacity.
RateCity analysis says borrowing capacity might improve by between 4% and 5% as a result of the Stage 3 tax cuts.
LJ Hooker head of research Mathew Tiller, says there has already seen an increase in investor activity over the last six or so months with much lower vacancies and higher yields.
“With more money tipped into everyone’s pockets, that could increase buyer demand from both investors and owner-occupiers. It would also help borrowing capacity for investors and the serviceability of their mortgages,” he says.
Under the Stage 3 tax cuts people on $100,000 a year receive a tax cut of $2179 a year, those on $190,000 and above will receive a cut of $4529, and those on $70,000 will receive a tax cut of $1429.
