When the federal budget was released at the beginning of May, there was a raft of changes that would make it easier for small business to expand and receive tax benefits. For example, the tax deduction threshold for assets and equipment used to be $1,000 – now it has been expanded to $20,000. This could be ideal for many companies in commercial real estate on the Gold Coast.
On top of this, companies that have annual turnover of less than $2million will receive a 1.5 per cent cut to the company tax rate, bringing it down to 28.5 per cent. Those in this turnover bracket that are also unincorporated can receive a further five per cent tax break from the beginning of this month. All in all, tax savings are expected to total $1.8billion by 2020.
What this means is that businesses can expect a lot more positivity on their bottom line, and perhaps more room to spend and expand. And judging by the latest figures, this is exactly what they're doing.
Each month, the Commonwealth Bank Business Sales Indicator (BSI) records the expenditure of companies in Australia – something that would be keenly observed in the wake of these budget measures for small business.
For May this year, sales went up in every state and territory. For Queensland there was a boost of 0.9 per cent, the same as Western Australia and New South Wales. On a year on year basis, Queensland businesses are experiencing 6.2 per cent more sales than in 2014. On top of this, in trend terms this is the 47th consecutive month of increases in the BSI for the Sunshine State.
This suggests excellent conditions for expanding retail leasing on the Gold Coast, or opening up a new shop in the area.
The aforementioned tax breaks on equipment appear to have been one area in which many business owners are willing to quickly take advantage of conditions. The Business Services sector of the BSI rose by 1.9 per cent in May, which is the largest boost the index has seen since May 2012.
This sector includes the following:
These all form part of establishing or expanding a business when you lease commercial property on the Gold Coast, and it suggests a hive of activity right across the nation. With a $19,000 extension of the threshold on tax breaks for equipment purchases, many businesses may be stocking up on items that were previously out of their financial reach.
Whether it is the latest accounting software, a new till system or a forklift for your industrial real estate on the Gold Coast, there is a raft of options opened up by budget measures. Many Australians have already dived headfirst into this opportunity – have you?
The biggest rise in business sales in years may not be an isolated peak, either. CommSec chief economist Craig James thinks that the conditions are right for this strength to continue.
"The latest sales figures indicate that consumer spending will continue to rise in the year ahead, fuelled by low interest rates, a firmer job market and improving economic outlook," he stated in a 23 June media release.
Claire Roberts, the executive general manager for local business banking at the Commonwealth Bank, has urged businesses to prepare for fluctuations, depending on their region. However, no matter where you are, these budget measures will continue to apply.
If these measures have seen your bottom line improve, it may be time to expand. Consider talking to Ray White Surfers Paradise about your Gold Coast commercial property prospects.