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.

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.