With the stage 3 tax cuts soon to come into effect, Aussie Home Loans has revealed new research analysing its potential effect on borrowing capacity.
Franchise brokerage Aussie Home Loans (Aussie) released new research yesterday (19 June) finding that the upcoming stage 3 tax cuts could increase a buyer’s borrowing capacity.
The tax cuts are set to come into effect from 1 July and will reduce the 32.5 per cent tax bracket down to 30 per cent and increase the 37 per cent tax bracket threshold from $120,000 to $135,000.
The lowest tax bracket rate will be reduced to 16 per cent for those earning $18,000–$45,000, while the 45 per cent threshold is also being increased to $190,000, up from $180,000.
Aussie’s research found that single Australians with no dependents earning $120,000 a year can currently borrow a maximum of $615,135. Due to the tax cuts, this could increase in the financial year 2025 by $27,062 (or 4.4 per cent) on a mortgage based on a 6.28 per cent interest rate.
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