Taxpayers earning over $50,000 a year will be hit with a new 12-month flood levy from July 1, 2011. Those earning between $50,000 and $100,000 a year would pay an additional 0.5 per cent flood levy tax, while those earning over $100,000 would pay an additional 1 per cent tax. For example, if you earn $60,000 per year, you will have to pay ($60,000-$50,000)x0.5%=$50 for the 12 months. If you earn $120,000, you will have to pay ($100,000-$50,000)x0.5%+($120,000-$100,000)x1%=$450 for the 12 months period.
Suppose you have an investment property, the property will actually be able to cover the flood levy. The median weekly rent is $375 and the prediction is that this will go up by at least 2.8% in 2011. The extra income you can get will be $375×2.8%x50weeks(vacancy rate is 3.85%)=$525 – it is more than enough to cover the flood levy. So if you have an investment property, please don’t complain if you have to pay the flood levy.
How the flood levy is calculated
A levy of 0.5 per cent will be applied on that part of an individual’s income between $50,001 and $100,000 and a levy of 1.0 per cent will be applied on that part of the taxpayer’s taxable income above $100,000. No levy is payable where the person has income of $50,000 or less.
| Taxable income | Flood levy on this income |
| 0 – $5,0000 | Nil |
| $50,001 – $100,000 | 0.5c for each $1 over $50,000 |
| $100,001 and over | $250 plus 1c for each $1 over $100,000 |
Non-residents have to pay the flood levy as well, according to ATO:
Who will have to pay the flood levy?
Individual taxpayers, both residents and non-residents, who have a taxable income over $50,000 in the 2011-12 financial year will have to pay the flood levy.
Source link: http://www.ato.gov.au/individuals/PrintFriendly.aspx?ms=individuals&doc=/content/00216565.htm