There is not a lot to be excited about for real estate business owners or employees in this year’s budget but there are a few items to be aware of including some tax incentives and cost of living measures.

The top items from this year’s budget for real estate businesses are: 

1. 120% Deduction for skills + training costs  

To support businesses in upskilling and training their employees, the Government has announced skills and training boost. Small businesses with a turnover of less than $50 million will be entitled to an additional 20% tax deduction for eligible training expenditure [i.e. for every $100 spent by businesses, they will receive a $120 tax deduction].  

The expenditure must be on external training courses provided to employees, meaning in-house training and on the job training will not be eligible. The training courses will need to be provided to employees in Australia or online and must be delivered by training organisations registered in Australia.  

The boost will apply for expenditure incurred from the budget night [7:30 pm AEDT on 29 March 2022] until 30 June 2022 and from 1 July 2022 to 30 June 2024. Important note for businesses: expenditure incurred during the 30 June 2022 year, will be eligible for the 120% deduction in the 30 June 2023 income year. For 30 June 2023 and 30 June 2024 expenditure, the 120% deduction will be available for the year in which the expenditure is incurred.  

So what does this mean for businesses? Any expenditure on external training for employees between now and 30 June 2022 will not receive the 120% deduction until 30 June 2023 year. The type of training expenditure that will be eligible for the 120% deduction has not been released yet, so stay tuned for more details. 

Being an industry that loves training and skills development, it will be interesting to see what type of training will be eligible for the concession.  It could be a great opportunity to invest in your team but please remember, the additional 20% deduction only really equates to an extra $5 of tax refund for every $100 spent. 

2. 120% Deduction for Digital Adoption  

Similar to the skills + training boost, the Government will introduce an investment boost to support digital adoption by small businesses. Businesses who incur costs on business expenses and depreciating assets to support digital adoption such as portable payment devices, cyber security systems and subscriptions to cloud-based services will be entitled to an additional 20% tax deduction.  

Again, the technology investment boost will be available to small businesses with a turnover of less than $50 million and expenditure will be capped at $100,000 annually.  

The boost will be for expenditure incurred from the budget night [7:30 pm AEDT on 29 March 2022] until 30 June 2022 and from 1 July 2022 to 30 June 2023. Important note for businesses: expenditure incurred during 30 June 2022 year will be eligible for the 120% deduction in the 30 June 2023 income year. For 30 June 2023 expenditure, the 120% deduction will be available for the year in which the expenditure is incurred.  

So what does this mean for businesses? Any eligible expenditure on technology/digital adoption between now and 30 June 2022 will not receive the 120% deduction until the 30 June 2023 year. As with the skills + training boost above, the devil will be in the detail as to the type of expenditure that will be eligible for the 120% deduction, so stay tuned for more details once it’s released. 

As an industry that has invested a fortune in digitalisation in recent times, it will be interesting to see what new expenses would be eligible for these additional deductions. Please remember, the additional 20% deduction only really equates to an extra $5 of tax refund for every $100 spent. 

3. Employee share schemes  

In recent years the Government has made a number of changes to the Employee Share Scheme [ESS] rules to encourage greater participation from unlisted companies and start-ups in employee share schemes. These measures have assisted employees in sharing in the upside benefits of growing companies, which may not be able to remunerate employees through cash bonuses or other incentives.  

The Government announced changes to the ESS rules to enable more employees to participate in the growth of businesses by reducing red tape and removing regulatory requirements for independent contractors where they do not have to pay for ESS interests.  

Currently, unlisted companies will be eligible for regulatory relief relating to disclosure rules for offers of ESS interests where the value of the ESS interests are less than $5,000 per eligible participant [See ASIC Class Order CO 14/1001].  

The proposed amendments will see this cap lifted to $30,000 per participant per year, which will be able to be accrued for unexercised options for up to 5 years, plus 70% of dividends and cash bonuses. The cap will also be removed entirely if it allows for participants in the ESS to immediately take advantage of a planned sale or listing of a company to sell their purchased interests for a profit.  

With lots of talk in the industry about progressing key people to holding equity, it will be interesting to see if the real estate industry can take advantage of these measures to issue employee shares.  

4. Apprenticeship scheme extended  

The boosting apprenticeships wage subsidy was due to end on 31 March 2022 but as part of the budget, this subsidy will be extended to the end of the financial year. The scheme offers employers who take on apprentices or trainees before June 30 a wage subsidy of 50% for the first year – up to a maximum of $28,000. The subsidy is paid in quarterly instalments of $7,000.  

Many in the real estate industry have benefited from this scheme to date – great to see it extended! 

5. Temporary reduction in fuel excise  

With rising fuel prices a hot topic for both Australian households and businesses, the Government has announced a temporary reduction in fuel excise. From midnight last night [29 March 2022], the excise will be halved until 28 September 2022.  

This should reflect 22.1 cents saving per litre from 30 March 2022. Surprisingly this measure is targeted at Australian households and small businesses, however, it doesn’t limit the businesses to which this will apply. It is simply a halving to the fuel excise for 6 months.  

For businesses with a heavy reliance on motor vehicles, this will be a welcome saving directly at the pump, and we expect to see this reduction flow through to consumers in the coming weeks.  

The Australian Competition and Consumer Commission will be tasked with monitoring retailers to ensure this excise reduction is passed on to end consumers.  

As heavy users of your vehicles, I am sure many in the industry will enjoy this reduction while it lasts. 

6. Temporary full expensing of Assets coming to an end 

Whilst an extension to the temporary full expensing rules were absent from the 2022-2023 budget, remember these measures will end on 30 June 2023.  

The temporary full expensing measures allow businesses with an aggregated turnover of up to $5 billion to deduct the full cost of eligible assets. 

So, what does this mean for business? You have until 30 June 2023 to invest in assets and get an immediate full write-off of pretty much all eligible new assets [remember capital works such as building improvements, assets located outside of Australia or pre-existing commitments are excluded]. 

The good news for businesses with turnover of less than $50 million is certain secondhand assets are also eligible for the temporary full expensing. 

Remember to ensure the asset is installed ready for use by 30 June 2023 and you need to be carrying on a business to be eligible. 

We thought this might become a long-term component of the Australian tax system but the fact that they have not extended this again indicates it will be coming to an end next year. 

7. Loss carry back rules coming to an end 

For companies with a turnover of less than $5 billion, the temporary loss carry-back rules apply until the 2022-23 financial year. This measure allows entities with tax losses from 2019-2020, 2020-2021, 2021-2022 and 2022-2023 financial years to carry back those losses and apply to previously taxed profits from as far back as the 2018-2019 financial year. 

The offset is first available when companies lodge their 2020-2021 tax returns and will offset any tax payable for the 2020-2021 financial year. 

However, this measure is only available for corporate entities, compared to the temporary full expensing of assets so this measure does not apply to businesses who operate through a trust structure.  

8. Cost of living tax offset  

The Low and Middle Income Tax Offset [LMITO] will be increased from $1,080 per individual to $1,500 per individual [an increase of $420] for 30 June 2022. The existing features of the LMITO will remain unchanged, including the offset end date of 30 June 2022. Importantly we want to emphasise that the entire LMITO is proposed to finish after 30 June 2022. 

The LMITO is a non-refundable offset, which means for taxpayers who do not have an income tax liability, they are not entitled to the LMITO. The increase in the LMITO is designed to help single people and families with the increased cost of living pressures.  

This offset is available for taxpayers when they complete their 30 June 2022 tax returns. 

Taxable income  LMITO 
$0 to $37,000  Up to $675 
$37,001 to $48,000  $675 to $1,500 
$48,001 to $90,000  $1,500 
$90,001 to $126,000  $420 to $1,500 
$126,001 and over   Nil  


Lets hope most in the industry don’t rely on this offset because they earn so much income that they are not eligible.  We have included nevertheless for completeness. 

9. Cost of living payment  

To assist with the rising cost of living, the Government has announced a one-off payment of $250. This payment will be made in April 2022 to the following eligible concession card holders:  

  • Age Pension 
  • Disability Support Pension 
  • Parenting Payment 
  • Carer Payment 
  • Carer Allowance [if not in receipt of a primary income support payment]
  • Jobseeker Payment 
  • Youth Allowance 
  • Austudy and Abstudy Living Allowance 
  • Double Orphan Pension 
  • Special Benefit 
  • Farm Household Allowance 
  • Pensioner Concession Card [PCC] holders 
  • Commonwealth Seniors Health Card holders 
  • eligible Veterans’ Affairs payment recipients and Veteran Gold card holders

Again, hopefully, none of you are eligible for this payment but we have included it for completeness given it is a highly discussed item from the budget. 

10. Affordable housing 

To increase affordable housing, the Government announced budget measures aimed at making homes more accessible for first home buyers, regional Australians and single parents.  

The Home Guarantee Scheme is set to increase to 50,000 places per year for 3 years from 2022-23 than 35,000 places a year on an ongoing basis. The scheme will enable potential homeowners to enter the market with deposits as low as 5% for first home buyers and 2% for single parents. The Regional Home Guarantee will support eligible homebuyers [who have not owned a home for 5 years] to purchase a new regional home with only a 5% deposit. 

The Finance and Investment Corporation will also receive $2.0 billion to support increased loans for affordable housing. 

Another great existing measure being continued is that the real estate industry will benefit from the consequential demand pull. 

11. PAYG instalments  

This measure is a tweak to the current PAYG instalment system which allows taxpayers to vary their instalments where they estimate their taxable income to be less than the previous year.  

It will  allow companies to calculate PAYG instalments based on current financial performance, with the aim of helping businesses with their cash flow based on the business’ profitability.  

Nothing to get too excited about here as it only gives you a timing benefit. 

12. STP + payroll tax  

There will be additional spending for the development of IT infrastructure to enable the ATO to share single-touch payroll data with State and Territory revenue authorities on an ongoing basis.  

This is a timely reminder for businesses to ensure the payroll data they are providing to State and Territory revenue authorities is accurate, as this data sharing from the ATO may create Payroll Tax reviews.  

Big brother is coming and the government authorities are sharing more and more information – this is just another step in that process. 

13. Covid grants – non-assessable, non-exempt income  

During the COVID-19 pandemic, to support businesses impacted by lockdowns, the State Governments and territories provided business support programs.  

The Government has announced the following state and territory business support grants are non-assessable, non-exempt income for 30 June 2022:  

  • New South Wales Accommodation Support Grant  
  • New South Wales Commercial Landlord Hardship Grant  
  • New South Wales Performing Arts Relaunch Package  
  • New South Wales Festival Relaunch Package  
  • New South Wales 2022 Small Business Support Program  
  • Queensland 2021 COVID-19 Business Support Grant  
  • South Australia COVID-19 Tourism and Hospitality Support Grant  
  • South Australia COVID-19 Business Hardship Grant 

A good to know! 

14. Covid test expenses  

As previously announced by the Government on 8 February 2022, employees who are required to purchase and take rapid tests to attend their workplace will be tax-deductible where the expense is paid for by the employee  

Where the employer makes these tests available to employees, to enable employees to attend their workplace, the Government will ensure the costs of these rapid tests will be exempt from fringe benefits tax  

Hopefully, you don’t need to keep buying RAT’s but if you do they are clearly now deductible if for work/business purposes. 

15. ATO taskforce  

The Government has committed additional funding to support the extension of the Australian Taxation Office [ATO] Tax Avoidance Taskforce for another 2 years until 30 June 2025  

The Taskforce was established to undertake compliance activities targeting multinationals, large public and private groups, trusts and high net worth individuals.  

The Taskforce will also use its resources to scrutinise specialist tax advisors and intermediaries that promote tax avoidance schemes and strategies  

More money to the ATO to keep everyone honest.

Bonus items:  Superannuation measures  

While no significant changes in this budget for superannuation and retirees, there are other notable superannuation changes from previous budgets due to commence on 1 July 2022:

  • The Super Guarantee [SG] rate is still set to increase to 10.5% on 1 July 2022. The SG rate is set to rise by 0.50% each financial year until Super Guarantee reaches 12%. 
  • Downsizer contribution – those of retirement age looking to downsize their home and make additional superannuation contributions, the lower age threshold has now been reduced to age 60.  
  • The $450 monthly income threshold for mandatory employer contributions has been removed.  
  • The maximum amount of voluntary superannuation contributions that can be released under the First Home Super Saver Scheme increased from $30,000 to $50,000. 
  • The contribution work test was removed for those aged between 67 and 74. This will allow individuals aged 67 to 74 years to make or receive non-concessional [including under the bring-forward rule] or salary sacrifice superannuation contributions. The removal of the work test does not apply to personal deductible contributions. People in the 67 to 74 age bracket will still need to satisfy the work test to claim a tax deduction for personal contributions. 

If you need help understanding what the budget means for you and you just prefer to know exactly how it will affect your affairs, please reach out to our real estate specialist team on 1300BDEPOT or email us at to speak to a real estate accountant who will be happy to help.