In a survey of 2,005 people, undertaken by comparison website finder.com.au, more than three-quarters (77 per cent) believed they would get a tax rebate from the tax office this year.
Of the 77 per cent, 31 per cent said that they would save the money, with 10 per cent opting to use it to make additional mortgage repayments.
Those with children under the age of 10 were most likely to use their return to make extra mortgage repayments (15 per cent), compared to those with no kids (8 per cent) and those with adult children (6 per cent).
Age also played a factor as to how likely those receiving a rebate would be to save.
Baby Boomers were most likely to save their rebate (39 per cent), followed by Generation Y (34 per cent) and Generation X (24 per cent).
However, Generation Y were the age group most likely to use their rebate for mortgage repayments (16 per cent), followed by Generation Y (7 per cent). Only 4 per cent of Baby Boomers said they would use their rebate to make extra mortgage repayments.
Paying household bills (23 per cent), making additional credit card repayments (6 per cent) and holidays (12 per cent) were also commonly cited reasons for saving the rebates, the survey found.
In addition, the survey showed that Australians would either use their tax returns for educational purposes, for luxury consumer products or for investment. Men were more likely to invest the money (7 per cent compared to 1 per cent of women), while women were twice as likely to use the tax rebate to get ahead of their credit card bill (8 per cent compared to 4 per cent).
Bessie Hassan, finder.com.au’s money expert, welcomed the finding that nearly a third of people would use their rebate to pay off expenses.
She said: “Using surplus cash towards mortgage or credit card repayments is a smart way to fast-track your way out of debt as it can greatly reduce your interest charges on long-term debt."
Ms Hassan also recommended that people plan ahead for the next financial year.
“Now is the time to ask for better deals on your financial accounts, to consolidate personal debt, and to think about your savings goals and strategies,” she said.
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.