Bluebird News

Please welcome our newest team member, and your new best friend, Elaine Moscatelli. Elaine has joined the Bluebird team as Personal Assistant and Office Administrator – this means that she’ll probably be the first one to answer your questions and emails. Those that have already spoken with Elaine know just how efficient and friendly she is. We are super excited to have her on board and she is quickly becoming the go-to person for pretty much everything. As always, call or email the office if you have any questions, just be aware that Elaine is probably going to be the one answering.

In the year 2020, where absolutely anything can happen, there are two important tax updates to be aware of. These are the:

1. Extension of the $150,000 instant asset write-off
2. $25,000 HomeBuilder Grant

Instant asset write-off extended to 31 December 2020

In March 2020, the instant asset write-off for eligible businesses increased from $30,000 to $150,000. The increase was due to end on 30 June but has now been extended until 31 December 2020.

This extension is great news, especially for small business owners who were wondering if they’d have the liquidity or turnover to sustain asset purchases outright or under finance. The extension will give businesses who are coming out of hibernation a chance to take advantage of the increase.

What is the instant asset write-off?

The instant asset write-off is where an eligible business can claim an immediate tax deduction (i.e. write-off) for the cost of an asset (either new or second-hand) up to $150,000 in the first year it’s used or installed ready for use. The government has now extended the increased amount until the end of December 2020.

Which businesses are eligible for the instant asset write-off scheme?

To be eligible for the full $150,000 threshold, your aggregated turnover needs to be less than $500 million up to the 30 of June 2020.

What isn’t included as an instant asset write-off?

This immediate write-off is not available for assets excluded from the simplified deprecation rules.  This includes assets that are leased out for more than 50% of their depreciable life, horticultural plants, assets that have been allocated to a low-value pool prior to simplified depreciation rules, software allocated to a software pool, or capital works deductions. 

$25,000 HomeBuilder Scheme

The second piece of tax news is the new HomeBuilder Scheme. This is a grant of $25,000 available to eligible home-owner occupiers who are building a new home or substantially renovating an existing home. This grant is designed to complement any other programs such as stamp duty reductions and home deposit schemes or savers.

It sounds too good to be true, and there are some important clauses that mean not everyone will be eligible. Here are some key points to consider:

Your Home:

• If you are building a new home, it must be your principal place of residence and cannot exceed $750,000 in value
• If you are substantially renovating your existing home, it must be your principal place of residence and not be valued over $1,500,000. Additionally, the renovation must cost between $150,000 and $750,000.

Your Income:

• For singles, your taxable income for 2019 or 2020 financial year must be less than $125,000
• For couples, your combined taxable income for the 2019 or 2020 financial year must be less than $200,000.

The contract:

• A contract must be entered into between 4 June 2020 and 31 December 2020
• Construction must commence within 3 months of the contract date.

So there are a few things to note for eligibility. If you need some assistance in calculating or determining eligibility please contact us.

As most of you are aware, Bluebird Accounting has been working remotely since March and will continue to do so until further notice. We understand that many of you are wanting to book in for your 2020 tax return. We’ll provide an update of when we’ll be conducting face-to-face meetings within the next 2 weeks. This will give you plenty of time to book your July 2020 income tax return meeting with one of our team members. Additionally, you may notice some changes in the way we conduct these meetings as we incorporate social distancing measures.

Looking forward to providing a tax time email to you all soon.

Until next time,

Liz, Julian & the Bluebird team