Budget Repair Levy - What a Joke

colin1 on 08/10/2016 - 07:48

Sorry Guys but I am having a a good old fashion whinge.

I sold an investment property that I owned for 25 years in January this year. I have just retired thus I have no regular income and will be a fully funding my retirement from my super fund and will need no government assistance.

When I visited my accountant to have my tax done I was surprised to find out about the 2% Budget Repair Levy. While I have no problems paying CGT on the gain on the property the additional tax on amounts above $180,000 is an absolute joke.

How many companies could charge there clients an additional 2% because they couldn't manage their business properly. If they put this additional charge on they would be out of business really quickly.

Also when having a whinge I may as well mention the Medicare Levy. I know everyone has to pay this levy but when a CGT event is triggered you have on your levy on your accessible income which in my
situation was quite large. I am in private health fund with top cover.

So in the end the government gets CGT, Budget Repair Levy & Increased Medicare Levy and now only let me add $100,000 non concessional to my super.

Is the government really trying to get people to be self funded retirees ?

Financial

Comments

  • inherentchoice on 08/10/2016 - 07:57
    +4

    Thank you for helping to pay for the ballooning welfare bill. And the politicians' benefits. And subsidising expensive green schemes.

    • RockyRaccoon on 08/10/2016 - 08:43
      +2

      Dont pick on the pollies, the top public servants benefits also require great subsidies, Superannuation schemes that leave those in the private sector wondering.

      Then there's the day care rorts that have been going on since 2009 which those employed by the government to administer couldnt even do something about, as those refusing to answer questions still got paid for years for having done nothing.

  • RockyRaccoon on 08/10/2016 - 08:50

    add $100,000 non concessional to my super.

    Is the government really trying to get people to be self funded retirees ?

    Well they sure aren't wanting to give you the pension.

    As of January the deeming rates change to you losing $3 per fornight of your pension for every dollar you have in Assets. So your $100000 will cost you

    26 payments of $300 lost = $7800 so you better get a great return on that $100000 (i.e. more than 7.8%) to make up for this

  • colin1 on 08/10/2016 - 09:13

    Hi Rocky,

    Have worked hard for the last 35 years to ensure I can look after myself in retirement so new deeming rates will not affect me

    • RockyRaccoon on 08/10/2016 - 10:45

      Congratulations and well done. I wasnt commenting on your circumstances, it was commenting on the question you raised.

      Is the government really trying to get people to be self funded retirees ?

      And I was saying, that in reality they and their public servant masters (yes they are the real runners of the country**) want this to happen, BUT do everything to incentivise people to do the opposite. Eg what Frugal Rock says

      ** many get more pay than the pollies and PM, as well they dont have to go thru the voting bullshit to keep their jobs

  • [Deactivated] on 08/10/2016 - 10:01
    +1

    Self funded retirement in Australia is an afterthought. On fixed interest you need $1-1.5 million in super to be at the minimum wage level, however if you are receiving a significant pharmaceutical benefit scheme subsidy, you would need $3 mill plus before self funding is worth it. For that reason, retirees on PBS are better off mattressing money for no interest and not self funding 'officially'. It's the reason there are so many home invasions on old people just on the 50% likelihood of cash in the attic because so many are doing it. A crazy proportion of Australian $100 notes aren't in circulation due to mattress parking.

  • SBOB on 08/10/2016 - 11:56
    +3

    on the alternate hand, perhaps the mismanagement of the budget has aided in the rather massive property price increases we have seen over the last decade, so its likely you are up way more than that 2% 'levy' is taking away thanks to the governments less than responsible budgets ….

  • bargainslut on 08/10/2016 - 13:12

    Looking at the bigger picture it's a case of 'the hunt for taxes'. This is global and smacks of desperation from governments who are clueless about economics. The below link may resonate with some.
    https://www.armstrongeconomics.com/category/world-news/taxes…

  • Steptoe on 08/10/2016 - 13:27
    +1

    In hindsight, how did keeping the property and rental income compare against selling?

  • Aust on 08/10/2016 - 16:01

    You could have just linked your whirlpool post instead of typing this out twice.
    I agree with though op.

    • robbyjones on 08/10/2016 - 16:12
      +1

      They have this neat trick called copy and paste.

      • Steptoe on 08/10/2016 - 17:05
        +1

        OP may still use a typewriter.

        • kiitos on 09/10/2016 - 11:19

          Yep, you load a Whirlpool page into the typewriter, backed with an Ozbargain page as a carbon copy, and tour your post once. Easy.

      • bargainslut on 09/10/2016 - 10:39

        Space age stuff:)

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