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In October's edition of our Tax Insights Survey, we asked readers how the rising interest rates are impacting personal or business tax planning.
With the Australian economy navigating persistent inflation, fluctuating interest rates, and policy complexities, the survey results reveal where readers feel the greatest pressure. Here’s what respondents told us:
Survey Results
I am focusing on debt reduction to minimise future interest costs: 65%
Exploring investment opportunities with stable returns despite rate hikes: 8.5%
Reviewing tax-deductible expenses to offset higher borrowing costs: 8.5%
No significant impact on my tax strategy so far: 18%
Survey Analysis
With ongoing interest rate hikes, taxpayers are adopting a range of strategies to manage the financial impact. Our recent survey reveals the most common approaches:
- I am focusing on debt reduction to minimise future interest costs: The majority are prioritising debt reduction as a way to reduce the impact of rising interest expenses, focusing on building a more sustainable financial foundation.
- Exploring investment opportunities with stable returns despite rate hikes: Some are looking for new investments that offer reliable returns, even in a higher-rate environment. This approach aims to balance risks while capitalizing on potential gains.
- Reviewing tax-deductible expenses to offset higher borrowing costs: A portion of respondents are closely examining their deductible expenses, particularly interest-related costs, to ease the pressure of increased borrowing expenses.
- No significant impact on my tax strategy so far: For some, interest rate changes have not yet prompted adjustments to their tax strategy, possibly due to a lower reliance on borrowed funds or pre-existing financial structures that remain unaffected.
These insights highlight the varied ways Australians are responding to the challenges of rising interest rates, underscoring the importance of proactive tax planning in managing financial resilience.
