Australia

Individual - Significant developments

Last reviewed - 20 December 2019

The Australian government's seven-year Personal Income Tax (PIT) Plan from the 2018/19 federal Budget, which applies from 1 July 2018 to provide tax relief to individual taxpayers through lower PIT rates and a new low and middle tax offset, was updated to provide further relief to low and middle income earners. This includes a retrospective increase to the maximum amount of the low and middle income tax offset from 1 July 2018 and a plan that will see around 94% of Australian resident individual taxpayers face a marginal tax rate of 30% or less in the 2024/25 and later income years See the Taxes on personal income section for more information.

A series of measures relating to investment in Australian housing may affect certain individuals. From 1 July 2018, individuals aged 65 years or over can use the proceeds from the sale of their main residence to make ‘downsizer contributions’ to a complying superannuation fund. In addition, under the First Home Super Saver Scheme, from 1 July 2018, an individual can apply to have a fund release voluntary superannuation contributions, along with associated earnings, to help purchase their first home. See the Other taxes section for more information

Furthermore, the capital gains tax main residence exemption has been removed for foreign residents, subject to transitional relief provided in respect of properties held at 9 May 2017 disposed of on or before 30 June 2020, and an exception where the residence is sold as a result of certain 'life events'. See the Income determination section for more information.

New tax law denies tax deductions from 1 July 2019 for expenses related to the holding of certain vacant land that is not used in carrying on a business for the purpose of producing assessable income. See the Income determination section for more information.

From 1 January 2019, most feminine hygiene products are goods and services tax (GST)-free. See the Other taxes section for more information.

Legislation has been enacted in Australia to give effect to the double tax treaty signed by Australia and Israel on 28 March 2019, which, following its entry into force, will represent the first tax treaty between the two countries. Furthermore, the Organisation for Economic Co-operation and Development (OECD) Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) applies in Australia in respect of ‘covered countries’ (including France, Japan, New Zealand, and the United Kingdom) from as early as 1 January 2019. See the Foreign tax relief and tax treaties section for more information.

The Australian Taxation Office (ATO) currently has a high wealth private groups tax performance programme, which covers Australian resident individuals who, together with their associates, control wealth of more than 50 million Australian dollars (AUD). The aim of this programme is to provide greater assurance to the community that high wealth private groups are paying the right amount of tax. See the Tax administration section for more information.

Temporary economic stimulus measures introduced as part of the Federal Government’s economic response to COVID-19 provide support for individuals and households in the form of stimulus payments and income support, measures to allow early access to superannuation, and reducing the superannuation minimum drawdown rates. See the Other taxes section for more information on the temporary superannuation measures.