The Mid-Year Economic and Fiscal Outlook (MYEFO) brought significant changes to receipts policy decisions, with total receipts seeing a substantial increase of $0.5 billion for 2023–24 and a continuous uptrend of $1.2 billion over the four-year period ending in 2026–27. Let’s delve into the key tax receipt measures.

Foreign Investment Fee Reforms

Anticipated to boost receipts by $525.0 million across the 2023–27 timeline, amendments to foreign investment fees for purchasing established dwellings and vacancy fees involve

• Tripling foreign investment fees for established homes
• Doubling vacancy fees for foreign-owned dwellings purchased since May 9, 2017.

It’s important to note that these changes are pending legislation, with the government expressing its intention to introduce corresponding laws in 2024.

Denial of ATO Interest Charges Deductions

Starting July 1, 2025, the decision to disallow deductions for ATO interest charges, specifically the General Interest Charge (GIC) and Shortfall Interest Charge (SIC), is estimated to increase receipts by $500.0 million until 2026–27. This move implies that any GIC or SIC later remitted won’t need to be included as assessable income.

Alteration in Foreign Resident Capital Gains Withholding

The decision to raise the foreign resident capital gains withholding tax rate to 15% and reduce the withholding threshold to $0 for real property disposals contracted from January 1, 2025, is expected to increase receipts by $150.0 million. Simultaneously, this change is projected to raise payments by $5.9 million until 2026–27.

This proactive evolution in receipts policy decisions underscores a strategic manoeuver aimed at recalibrating fiscal dynamics and driving economic initiatives into the foreseeable future. For further details on the Government policy decisions report, click here.

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