Q: Investment loan has been fixed for 3 years and about to mature - $750,000 loan with CBA. We would like to keep the loan interest only and they have now offered 4.75% variable. That seems extraordinary high… what is the market rate?
A: IO rates from 4.29% available elsewhere, happy to discuss further with you.
Q: Looking to buy 6 units and the CBA has told me I can only get the loan under a Pty/Ltd or company trust. They wont lend to an individual for commercial residential loans?
Is this the same with all banks or just a CBA thing?
A: I can give you some options as well.
Q: if i rent my house out and there is a short fall of 1000 buck a month can i claim it all back at tax time?
A: Hi Andy,
You most certainly can as what you have described is termed negative gearing, that is any loss incurred can be deducted from your personal income.
So if you earnt 100k and your property ran at a loss of 1k per month you would be taxed on 88k.
Make sure you get a depreciation schedule done as well as this could also add deductions to your taxable income.
Also important to get an accountant who is familiar with investment properties.
Happy to provide some recomendations if you like?
Q: My sister, brother and I would like to buy a property together and we have been asked if we want to buy the property as joint tenants or tenants in common. What do people recommend?
A: Your settlement agent would be able to advise for your unique situation, however the most common is joint tenants as in the case of someone passing the property automatically gets given to the other party.
Q: Hi. I have already bought an investment property from the available funds of offset bank account for a mortgage home where I live now.
To keep new house on investment officially I contacted NAB bank. NAB bank is ready to swap over the property title-papers but advices that I will not be able to take advantage of tax benefits by doing so because govt tax officers check what was the purpose of the home loan originally? Please advice me now how do I take advantage of tax benefits?
A: Did you set up a separate loan split for the investment deposit plus costs portion or take it from a personal offset account? if you took it form a personal offset then you may have a mixed purpose loan as you have mixed investment and personal debt.
If you used 100% cash from an offset account then this is considered a cash purchase and no deductions will be allowed as the funds where not borrowed. You needed to borrow the funds in order to create a legitimate tax deduction .
Q: We are a Strata of 6 villas. We have a council of owner and a Strata manager. We are applying for a tax file number. Do we have to have a ABN number?
We collect Strata fees and have a sinking fund of $5000. We will be below taxable income
A: As far as I am aware you do not need an ABN for a strata and dont believe tax is payable on levy's collected.
If you have a strata management team on board they should be able to clarify your queries.
Q: My partner and I bought a house in Perth in 1967 with the deed in both names. We had a child together but split up not long after and my partner has lived in the house ever since while I relocated overseas where I have resided ever since. For health reasons I am unable to return to Australia. Can I safely assume that I have retained a 50 percent ownership of the property and what is the best way of protecting my rights to my share on the death of either myself or my ex partner?
A: I believe you still own a 50% share in the property if you where on the contract as "tenants in common" when you purchased the house.
I recommend you engage the services of a property lawyer / settlement agent as this is their area of specialty. I work with a great one and happy to recommend to you. Very good operators and they offer discounts to all my clients that I introduce.
Q: I am aware that super funds can be accessed early, however if the lump sum is moved to your self-managed super fun, does it get taxed? or if you are to withdraw your super due to 'x,y or z" reason would it be taxed?
A: Moving the funds wont trigger a tax bill but you will pay tax on future earnings. This is my personal experience. You need to check with a tax accountant what is specific to your situation.
Q: We have found a property we would really like to buy but haven’t sold or even put our home on the market. Is there such a thing as a 4 – 6 months delayed settlement?
A: You can negotiate any settlement terms you like but they would need to suit the seller. If the seller does not need to move in a hurry it could work for them but you would need to talk to the selling agent about this.
If you have to put your home on the market in order to purchase the property you would need to do a "subject to sale" contract. If someone comes along with a "subject to finance" or a cash offer it will trump your "subject to sale" offer.
Without knowing your complete situation there may be other ways to skin this cat and the first step would be to talk to an experienced mortgage broker to determine your options. Most brokers will look at this as a part of the service at no cost to you. Happy to help.
Q: I have a very small default ($395.00 and paid) after moving around a few rental properties. I have a $30,000 deposit and want to look at a property $520,000. My income is $122,000 pa and I have a 3 year old. Is it possible to borrow 95% and will the default be an issue, thanks?
A: Nathan nailed it.
As a general rule of thumb you will need min 5% depisit and 5% for cost based on purchase price.
Q: I want to put my house in my children's name
What is the best way to do this.?
A: You will need to utilise the services of a settlement agent and not DIY
Children will need to demonstrate servicing capacity if a debt is also to be transferred?
Stamp duty at the nominal value will also be payable.
Happy to pass on details of a settlement agent / property lawyer I use for all my clients based in Osborne Park.
Q: I have had an apartment for sale through a real estate agent for approximately 8 months The exclusive period has now finished but I am still leaving it with him to sell.
If a private buyer comes to me now with an offer do I have to pay any commission to the agent.?He has not introduced any buyers to me.
RB Perth WA
A: If the agent does not have "sole selling rights" then it is fine to sell privately and not pay any fees.
Q: Same Unit. I have an equity line and the unit is the surety over the loan.We paid back the equity loan to 0 dollars.
We then purchased a house that is now our residential home.We borrowed more money on the equity loan to buy the house. We use the equity loan for normal day to day use as well.The unit is now rented out.The unit is still the surety over the loan. Can we claim any interest off the unit for tax purposes or is it not possible because we paid the loan down before?
A: Question to ask is - "What is the purpose of the funds" and this will determine deductability or not.
Seems the purpose in this case is all personal so based on that premise its non deductable debt.
I would look to split the LOC between personal and PPOR use just in case you rent out your PPOR in the future as the LOC associated with the PPOR may then become deductable.
Q: I have an investment unit.It was rented for one month in the 2015/16 financial year.If I get a depreciation s chedule done for the property can I claim for a full 12 months or only one month.?
Rod , WA
A: It will be pro rata so 1 month is correct. Check with your accountant to be sure.
Q: We are looking to refinance our home loan and want to know if the new loan has to be over 30 years. We have had our loan for 6 years and don’t want to start again. How should we structure a new loan?
A: You can do a 24 year loan term with the new lender.
However there may be a different loan structure that may be more suitable and this will be determined by your short, medium and longer term goals as well as the rest of your financial situation.
Happy to offer you a free review and advise on the best structure going forward.
Q: Can you request a business to get access to their cctv footage if you believe it may help solve a theft of personal belongings? In Western Australia
A: Yes, I was offered footage from an IGA store as someone rammed a trolley into my car. I fortunatley had front and rear dash cam so wasnt required.
If you dont ask you dont get :)
Q: What's the best way to approach my bank to try and obtain a better interest rate?
A: 1. Go direct to branch or call customer service line and request a discount to current rates.
2. Engage a broker. A broker can explore other options and loan structures that may be more suitable for you inline with short, medium and long term goals. A decent broker can also approach your existing bank to negotiate a discount on your behalf.
Hope this helps :)
Q: What lenders cap LMI above 95% for Owner Occupier (NOT first home buyer), other than BoQ and Bankwest?
A: You sound like a broker :)
Policy inline with applicants goals will need to be factored in.
There are several others than the ones mentioned. Contact me for further details.
Q: My husband works in construction and has been made redundant and has been given 2 weeks notice. His finishing date is 30th June. His pay week is from the 26th June to 2nd July. He is owed a substantial pay out and we are being told it will roll over into the new financial year which is exactly what we want. Do you think this will be the case?
A: Hi Sue, it will come down to what the employer puts on the group certificate. If the payout comes in this payslip it should carry over to the new financial year but will come down to the employers discretion to what year it is included in for income and tax purposes.
I would ask for confirmation in writing that it will be included in the 2017 financial years income and not 2016s.
Q: I would like to start a business, helping restaurant owners renovate their shops. What tax deductions can the restaurant owners claim? Can they claim services on renovation? Can they claim tax deductions for the services I provide them?
A: Any legitimate cost of doing business should be tax deductible.
There should be some depreciation expenses on the equipment and fittings as well.
Always best to check with your accountant for verification before making a claim.
Q: I am working in a tax free country as an Aussie Expat.
Buying a house back in Perth seems to still be in the too hard basket.
What is the best method to get into the market from outside the country as a non-tax paying Australian citizen?
A: Yes it is still possible, albeit limited options and as Nicole covered off income will be converted to 80% of nett to be used to determine borrowing capacity, as well as all other debts you may have will need to considered.
In regards to determining borrowing capacity you would be well served by an experienced broker who works in this space. I have one awaiting approval with a big 4 lender and client is Aussie Citizen paid in AUD via a company in the Philippines he is employed by, whilst living in Thailand.
Happy to do a preliminary assessment at no cost to you to see what your options are.
Q: I've been out of work for the past 9 months got very behind in my mortgage and so now that I am at preservation age I took 25K from my superannuation and paid off the mortgage debt. Today I got the bad news that I am unlikely to be able to work for at least another 6 months. I have only 13K of superannuation left. I took the 25K in late March. Can I access the remainder of my super? When? Thanks Deb
A: It would have been better to place the funds in redraw so that you can access them if required. Its always a better option to have access to the money via redraw or an offset account rather than tying it up in bricks and mortar as you have found out.
You can still "pay off" your mortgage and have access to the surplus funds in case of emergencies.
Q: I am self employed and am considering taking out some insurance in case I can't work due to illness, broken leg etc. If I take this insurance out is it 100% deductible at the end of the tax year?
A: Hi @Dawn P. - yes, income protection should be 100% tax deductible. Please check with your accountant that this applies to your situation.
Q: Hi, I'm setting up an online computer store and am confused about the tax side of things, if i buy a product for example, for $600 inc GST, then sell it on my site for $700 inc GST, Can I claim GST credit on the GST paid to the supplier? Or are you not able to claim GST credit for this? Thanks,
A: Hi Jamil,
You can claim a credit for any GST paid when you purchase goods and conversley you collect a gst when you sell goods. This is reconciled and paid on a quarterly basis if yout turnover is 75k+. If sub 75k its done annually when you do your tax.
Disclaimer - Im not an accountant so please check my opinion with your accountant..
Q: My 22 y.o. son wants a personal loan of $25000 to help me with my mortgage debt and do some car repairs. He has a credit score of 489 and has been declined 3 times. Does he have any options?
A: First step is to get a copy of his credit file which will reveal the reasons for the decline. You can get a free copy from www.mycreditfile.com.au that takes 2 weeks and a paid copy for $70 that is sent instantly or close to it.
Credit score and credit file are different.
Q: I have purchased an investment property and am renting it to my son and his family however I would eventually like to sell the property to him and his wife but as he is self employed and has four young children he would find it difficult to obtain finance. I am thinking of taking money out of my superannuation giving it to him to assist with a substantial deposit to assist in gaining finance. Do you think this would be worth considering?
A: Hi Archie,
There are alternative options available for self employed people that may suit your sons situation.
First step would be to speak with a finance broker to determine eligibility and borrowing capacity within the options available. Most will offer this service free of charge as the bank will pay them a commision for a succesful application and its not added to the rate. In most cases you will get a better deal than going direct to the bank.
I would only access your super as a last resort and you would need to seek independent advice on this.
Hope this helps.
Q: My son has a car loan through a finance company that he has fallen behind in repaying and due to sporadic employment doesn't look like he will be able to repay. What are his options?
A: First port of call would be the lender as most will have a provision for hardship. Ask what the "payout figure" is as it may be worthwhile considering what the car is worth v what he owes in order to consider a sale and downsize.
Q: During the 2016 and now the 2017 tax year I worked in China as an Australian resident.
For my 2016 tax return I was given a tax bill of $27,000 as the tax I paid in China did not cover what would be owed in Australia.
For 2017 tax return, I earned $51,000 in China and paid $21,000 in tax to China. (Paying about $12,000 more than I would have had to pay in Australia).
Will the Australian government recognise this and give me a credit towards my tax bill?
A: Hi Nick,
I would give the ATO a call and run it past them. They are usually responsive to phone calls in a reasonable time frame and seem knowledgable.
Q: Hi im a first home renter and have just moved into a 1 bedroom apartment, i know it depends on personal use but i was just wondering for 2 people how much electricity, water + gas would be. I was hoping around putting away $500 a month for bills? I have no idea! Thanks.
A: Hi Kayla,
$500 will be ample to cover utilites.
Bills are charged bi monthly. You can do what is called "bill smoothing" where you can elect to have a monthly amount nominated by you debited from your bank account automatically. If you are in credit this will be noted on your bill which can be emailed.
Pay manually for 6 months and then work out your average usuage and set up bill smoothing and set and forget. Just make sure you have adequate funds in your account as bank will charge you a fee as well as the supplier.
Having a good repayment history will improve your credit score as well with the new positive reporting metrics that will be applied with greater measure in the near future.
A good credit score will put you in a strong position when you apply for finance for a car or home loan in the future.
Hope this helps?
Q: When we got our home loan early this year the rate was 4.22% and since then the RBA has cut rates twice but when I looked at our rate online it is showing 4.02%. Should we have received more than 0.2% rate drop?
A: Kudos to you Tom for actually having the nous to know what your actual rate is as lenders rely on people not checking and most do not!
Call your bank and let them know you are talking to a broker/s and ready to jump ship if you dont reduce my rate to x?
I would however consider asking a broker to do this on your behalf as we can often have a bit more clout as lenders retention teams know that we are motivated to refinance you elsewhere. A professional broker will always see what your current lender can offer providing the servicing calculator and policies suit your short, medium and longer term goals.
Distance isn't an issue as many of us will have clients Australia wide and even some overseas.