Thrifty taxpayers plan to use tax refunds to pay off home loan and credit cards: Bankwest survey

About 42% of taxpayers will use any tax refund they receive from the Australian Tax Office (ATO) to pay off their debt, including their mortgages and credit cards, according to a new Bankwest survey.

The 2011-12 Taxing Time survey found – not surprisingly - that taxpayers have a very thrifty mentality as the end of the financial year looms just three days away.

Of the 42% who said they would some of their refund to pay off debt (up from 39%), the majority will focus on paying off their credit cards (63% versus 50% last year) while just over a third will use the refund to pay off more of their mortgage (34% versus 47% last year).

The same proportion of respondents this time round – 31% – said they would put some of the refund into their bank accounts, while nearly one in five (19%) said they would use the money to on basic commodities including rent and food. 

A lower proportion than last year – 15% compared, with 18% – said they use some of the money to indulge in something “exciting” like a new TV or a holiday.

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Taxpayers also expect to receive less from the government this year. 

The average expected tax return has decreased 13% across Australia to $2,017 for 2011-12 from $2,317 in 2010-11 financial year. 

The proportion of respondents who expect to receive a tax refund has dropped to 73% this year from 78% in the last financial year, while the proportion of people expecting to pay additional tax has increased to 9% from 6%. 

The results are based on an online survey of 800 people aged 18 and over carried out in May this year by CoreData on behalf of Bankwest.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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