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Tax Newsletter – May 2014
May 13, 2014 | 
Author Tax planning
There are many ways in which entities can defer income, maximise deductions and take advantage of other tax planning initiatives to manage their taxable incomes. Taxpayers should be aware that in order to maximise these opportunities, they need to start the year-end tax planning process early. Of course, those undertaking tax planning should be aware of the potential application of anti-avoidance provisions. However, if done correctly, tax planning can provide a number of tax savings for entities.
Deferring assessable income
- Income received in advance of services being provided is, generally, not assessable until the services are provided.
- Taxpayers who provide professional services may consider, in consultation with their clients, rendering accounts after 30 June in order to defer the income.
- A taxpayer is required to calculate the balancing adjustment amount resulting from the disposal of a depreciating asset. If the disposal of an asset will result in assessable income, a taxpayer may want to consider postponing the disposal to the following income year.
- Roll-over relief may be available for balancing adjustments arising from an involuntary disposal of assets where replacement assets are acquired.
Maximising deductions
Business taxpayers
- Taxpayers should review all outstanding debts prior to year-end to determine whether there are any debtors who may be unable to pay their bills. Once a taxpayer has done everything in their power to seek repayment of the debt, the taxpayer could consider writing off the balance as bad debt.
- The entitlement of corporate tax entities to deductions in respect of prior year losses is subject to certain restrictions. An entity needs to satisfy the “continuity of ownership” test before deducting the prior year losses. If the continuity of ownership test is failed, the entity may still deduct the loss if it satisfies the “same business” test.
- A deduction may be available on the disposal of a depreciating asset if a taxpayer stops using it and expects never to use it again. Therefore, asset registers may need to be reviewed for any assets that fit this category.
- Small business entities are entitled to an outright deduction for the taxable purpose proportion of the adjustable value of a depreciating asset, subject to conditions.
Non-business taxpayers
- Non-business taxpayers are entitled to an immediate deduction for assets used predominantly to produce assessable income and that cost $300 or less, subject to conditions.
- The self-employed and other eligible persons are entitled to a deduction for personal superannuation contributions, subject to meeting conditions such as the 10% rule.
Companies
- Companies should ensure that all dividends paid to shareholders during the relevant franking period (generally the income year) are franked to the same extent to avoid breaching the benchmark rule.
- Loans, payments and debts forgiven by private companies to their shareholders and associates may give rise to unfranked dividends that are assessable to the shareholders and their associates. Shareholders and entities should consider repaying loans and payments on time or have appropriate loan agreements in place.
- Companies should consider whether they have undertaken eligible research and development (R&D) activities that may be eligible for the R&D tax incentive.
- Companies may want to consider consolidating for tax purposes prior to year-end to reduce compliance costs and take advantage of tax opportunities available as a result of the consolidated group being treated as a single entity for tax purposes.
- Companies should carefully consider whether any deductions are available for any carried-forward tax losses, including by analysing the continuity of ownership and same business tests.
Trusts
- Taxpayers should review trust deeds to determine how trust income is defined. This may have an impact on the trustee’s tax planning.
- Trustees should consider whether a family trust election (FTE) is required to ensure that any losses or bad debts incurred by the trust will be deductible and to ensure that franking credits will be available to beneficiaries.
- Taxpayers should avoid retaining income in a trust because it may be taxed in the hands of the trustee at the top marginal tax rate of 46.5%.
Capital gains tax
- A taxpayer may consider crystallising any unrealised capital gains and losses to improve their overall tax position for an income year.
- Eligible small business entities can access a range of concessions for a capital gain made on a CGT asset that has been used in a business, provided certain conditions are met.
Superannuation
- For 2013–2014, a $35,000 concessional contributions cap applies for those who were aged 59 years or over on 30 June 2013. The $35,000 concessional cap will apply from 2014–2015 for those aged 49 years or over on 30 June of the previous income year.
- From 1 July 2013, excess concessional contributions tax has been abolished. Instead, excess concessional contributions are included in an individual’s assessable income (and subject to an interest charge).Excess non-concessional contributions tax continues to apply where relevant.
- Individuals who wish to take advantage of the concessionally taxed superannuation environment but wish to stay under the relevant contributions caps should consider keeping track of contributions and avoid making last minute contributions that would be allocated to the next financial year.
- Individuals with salary-sacrifice superannuation arrangements may want to have early discussions with their employers to help ensure contributions are allocated to the correct financial year.
- From 2012–2013, individuals earning above $300,000 are subject to an additional 15% tax on concessional contributions. However, despite the extra 15% tax, there is still an effective tax concession of 15% (ie the top marginal rate less 30%) on their contributions up to the relevant cap.
Fringe benefits tax
- The four rates used in the statutory formula method for determining the taxable value of car fringe benefits are being replaced with a single statutory rate of 20% for fringe benefits.
- The first $1,000 of the aggregate of the taxable values of “in-house” fringe benefits (ie in-house expense payment, in-house property and in-house residual fringe benefits) provided to an employee during a year is exempt from FBT. However, the $1,000 reduction does not apply to an in-house benefit provided on or after 22 October 2012 under a salary-packaging arrangement.
Individuals
- The current government has proposed to cancel the carbon tax-related income tax cuts that are legislated to commence on 1 July 2015, and repeal the associated amendments to the low-income tax offset (LITO). Under these changes, the tax-free threshold would remain at $18,200 and the maximum value of the LITO would remain at $445.
- The 30% private health insurance offset has been means tested since 1 July 2012. For 2013–2014, the singles’ income threshold for the 30% offset is $88,000 ($176,000 for families).
- The medical expenses offset is being phased out and will not be available after 2018–2019. Transitional arrangements allow taxpayers to claim the offset from the 2012–2013 income year until the end of the 2018–2019 income year, subject to limitations.
- From 2012–2013, the principal dependant offset is the dependant (invalid and carer) offset.
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Finance Newsletter – April 2014
Do you have the most suitable loan for your circumstances?
Do you have the best rate available?
If your interest rate is over 4.87% variable then you may be able to save thousands per year by changing loans and or banks. Bank of Queensland is currently offering customers 4.84% variable for home / investment loans. No application fee and no ongoing monthly or annual fees. They now have many branches in Perth. conditions apply. So if you are interested in saving thousands per year call Mercia finance to see if we can show you how benefit from a better rate.
If you have any questions about Family Equity, Reverse Mortgages or any other type of loan, call Dan Goodridge on 04144 233 40. Our service is free of charge to you the borrower and we have access to all the major lenders in WA.
Property Newsletter – April 2014
The key characteristics commonly shared by top property developers
Not everyone has what it takes to plan and undertake a successful property development. There is a lot you need to know, and last month we looked at four of the critical knowledge areas. It’s not just about what you know; having certain character traits can also prove extremely advantageous.
This month we outline some of the key characteristics commonly shared by top property developers. How many do you have?
Decisiveness
The best property developers live by the old truism ‘time equals money’. They know that unnecessary delays are to be avoided at all costs, because even a small delay can have disastrous flown-on effects to the schedule and budget. Decisiveness, or the ability to make quick decisions, is therefore an important trait to have.
Ability to spot potential
When searching for a development project, great opportunities are typically few and far between. And when these opportunities do come along, they certainly don’t hang around forever. Successful property developers can spot a good opportunity very quickly and in a matter of moments do a ‘quick feasibility’ to determine whether further investigation is warranted.
Deal making
Securing a development site isn’t always straight-forward. When negotiating with a seller, sometimes the developer needs to think outside the box and come up with a solution that works for all parties – they need to get the right deal done. This may involve, for instance, securing an option to buy the property, buying the site outright, or even entering into a joint venture with the property owner.
The key to making some developments profitable can come down to something as simple as a long settlement or an extended due diligence period.
Solution oriented
In any development, problems will arise that can sap the motivation of even the most motivated developer. It’s the developers who don’t get bogged down with the problems and choose instead to focus on solutions that have greater chance of success.
Big picture focus
Professional developers seem to have an innate ability to see the big picture and recognise ‘the wood through the trees’. They have an unwavering focus and the patience to see their vision gradually become a reality, even if it means making mistakes from time to time.
An understanding of quality vs time
There is a constant battle all property developers face. It’s comes from the reality that producing a better quality product will generally cost more in terms of time and money. With any project, you need to find the right balance, which means carefully understanding the particular market you are targeting. There’s no point in spending extra money in a particular area of the project if the market simply won’t pay for it.
Excellent people skills
The best property developers have excellent communication and interpersonal skills. They can relate to people from all walks of life and quickly build genuine rapport. Think about the variety of people a property developer might deal with, from property sellers, consultants, builders, and tradespeople to neighbours and members of the local council. It takes leadership skills and sometimes a big dose of diplomacy to successfully get the most out of these relationships.
Conclusion
This list provides a useful overview of the personal traits and characteristics that lend themselves to the property development arena, but it is by no means comprehensive.
A property development project is almost always a serious undertaking and not one to be faced unprepared. But if it’s done right, the rewards can be excellent.
For this reason, aspiring property developers without the necessary time and resources should always seek the help of a development manager or team, who can coordinate the entire process and provide valuable advice along the way.
Should you spread your loans amongst different lenders?
One of the financing decisions you’ll have to make as you grow your portfolio is whether to spread your loans amongst different lenders. The alternative option, of course, is to keep your loans with a single lender. So, what are the relative advantages of each of these strategies?
Going with one lender
The biggest advantage of having all your loans with a single lender is that you may benefit from volume-based discounts offered by the lender, depending on the total amount of your borrowing. This could mean slightly cheaper interest rates and reduced fees, potentially saving you money over the period of the loans.
There is also a convenience factor in having all your loans in one place, both in terms of managing your loans and submitting further applications.
Some people will also argue that, with this strategy, your lender will be more willing to lend you further money as they have a complete picture of total borrowings. This, however, is debatable.
Going with multiple lenders
A strong argument for having your loans with different lenders is that you can potentially borrow more money versus the single lender scenario. A lender who is right for your first loan is highly unlikely to be the lender most suited to your 4th or 5th investment property. Lender policies constantly change and spreading your loans makes it more likely you can move to the next property sooner.
It’s not a universal rule but in my experience you can typically do more with multiple lenders, but it does depend on your specific strategy.
One of the great things about spreading your portfolio amongst different lenders is that you can pick which of your properties you want to refinance when releasing equity. If all your loans are with one lender, the lender may require current valuations on all properties. In this case, the growth in one property may be offset by the decline in another, leaving you unable to draw equity.
Using multiple lenders also makes sense from a risk-management point of view. If you default on a loan, it may be more difficult for the lender to get its hands on other properties not under its control.
Spreading your lender exposure also means minimising the negative impact that could result should one lender decide to dramatically change its lending policies.
Conclusion
Despite the potential cost savings of having all your loans with one lender, many investors choose to spread their loans because of the increased flexibility and protection. A good mortgage broker can usually find ways of minimising costs while still utilising different lenders. Ultimately, the choice depends on your overall strategy, risk profile and financial resources, but for property investors looking to build a large portfolio spreading your lenders is the preferred strategy.
The pros and cons of investing in a brand new house and land package
It’s easy to see the appeal of investing in a new house and land package. Not only does this type of property look amazing in the brochures, it’s an easy option and comes with a host of advantages. However, do these benefits outweigh the negatives? Let’s look at the main pros and cons.
The Main Pros
Tenants love new homes
Tenants typically love brand new property and, let’s face it, why wouldn’t they; everything is in perfect condition, with up-to-date features and modern floor plans. For investors with this type of property, finding a tenant can be fairly easy (depending on the overall supply in an area) and rental returns can be strong.
Maintenance
With new property, there is none of that dreaded maintenance, at least for the first few years. You don’t have to worry about something falling apart after buying the property.
Depreciation benefits
New properties will generally get higher depreciation deductions than older properties, given the high starting value of the building, fixtures and fittings. More deductions means the out-of-pocket cost to hold the property may be lower.
Stamp duty saving
When investing in a new house and land package, you typically only pay stamp duty on the land component, which could mean saving thousands of dollars.
Flexibility
When building a home you can often tailor certain elements to suit your specific needs or to maximise the investment potential.
The Main Cons
Paying for someone else’s profit
When you buy any brand new property, factored into the price is the developer’s profit margin and a proportion of the high marketing costs that come with selling this type of property. These hidden ‘costs’ could be the equivalent of a few years of capital growth, putting you behind the eight ball from day one.
Compromised location
The majority of home and land packages are located on the outskirts of the city, in areas often with abundant supply of land, weaker economic drivers and a lack of infrastructure. Capital growth is therefore often harder to come by.
Uncertainty
When buying off the plan, you really don’t know whether the quality of the finishes will meet your expectations, or what the surrounding facilities and other homes will be like. There is also the uncertainty that the final bank valuation won’t stack up. Also you won’t know how many other similar rental properties have been sold to investors in the area.
Land value
Logic dictates that when investing you should seek out a property with a high proportion of land value, as this is what will drive capital growth. With new property, however, most of the value lies in the building component and not the land, which will hamper capital growth as the building depreciates.
A 30 year old property on a good size block in the middle of suburbia might not look too glamorous when compared to a brand new property, but chances are it will make a far better investment over the long term.
Paying without receiving
When building an investment property, you don’t receive any income while it is in the planning stages or under construction. But you will be paying interest on any money you have borrowed by that point.
Building surprises
Building can be a nightmare at the best of times, with construction delays a fairly common occurrence. The biggest surprise for many first-time builders is the amount of extra money that needs to be spent to get the property ready.
Inability to add value
Smart investors know that adding value to a property through renovations is a key strategy for accelerating the wealth-creation process. This option is rarely available with new property.
Conclusion
The bottom line is that while investing in new property can seem appealing, it often proves unsatisfying over the long term due to weaker capital growth. If you are looking at a long-term investment opportunity, more often than not, your best option will be a second hand property.
What exactly is fair wear and tear?
The reality of owning an investment property is that, in all likelihood, the condition of your property will decline over time. This can be hard for some investors to accept, especially when they don’t see their property very often.
All tenanted properties will experience some wear and tear, just as your own home will inevitably show signs that it has been lived in. If the wear and tear is considered to be ‘fair’, the tenant will not be liable for the damage and it cannot be claimed on your landlord’s insurance.
So, what exactly is fair wear and tear? There is no formal definition in the Residential Tenancies Act (1987), but it’s generally considered to be the damage that naturally and inevitably occurs as a result of normal use or ageing.
It sounds relatively straight-forward, but it’s an area of constant friction between landlords and tenants because of differing interpretations.
To clarify, let’s consider an example. Carpets have a limited life-span, probably between five and ten years, depending on a number of factors. Therefore, after a few years of use, you would expect to see signs of foot traffic in some areas. This damage would generally be considered fair wear and tear.
Faded curtains could also be an example of fair wear and tear, as the fading has most likely occurred through ageing and normal use. Other examples could be minor scratches on paintwork or even a lock that has broken because of its age.
What about accidental damage? How is that different from wear and tear? Accidental damage is caused by a sudden and unexpected event, such as spilling red wine on the carpet or damaging a wall while moving furniture. Wear and tear, on the other hand, accumulates over time.
What about neglectful damage? Like wear and tear, this sort of damage happens over time, but through some negligence on the part of the tenant rather than normal use. For instance, allowing mould to form in an area by failing to properly ventilate the property could be considered neglectful damage.
Tenants are normally liable for accidental and neglectful damage.
Clearly, when determining what is and isn’t fair wear and tear, it’s vital to have a comprehensive Property Condition Report. This document, produced at the start of a tenancy, will provide the basis for comparison in assessing any sort of damage.
An established favourite with a promising future
Warwick is located approximately 13km north of the Perth CBD and 5km from the ocean. It’s a suburb with a relatively small population, given the eastern third is devoted to native bushland, known as the Warwick Open Space.
Located within the City of Joondalup, Warwick was predominantly developed in the 1970s and consists mainly of three and four-bedroom brick and tile residences. It is a well-established area surrounded by other established suburbs or infrastructure, making the availability of land there very restricted.
Warwick hugs the Mitchell freeway, which is the lifeblood of the northern suburbs, offering quick and easy access to and from the Perth CBD and Joondalup, whether by car, bus or train. It has a substantial shopping complex with cinema, schools and plenty of parks and sporting facilities.
Part of Warwick’s appeal is that it is just a short drive to many of Perth’s most popular beaches, as well as Hillary’s Boat Harbour, a favourite destination for tourists and locals.
By Perth standards, Warwick is considered an affordable suburb with most properties priced close to the median house price of Perth. It offers good value for money, especially compared to the suburbs located to the west.
According to recent figures from REIWA, the median house price in Warwick is $560,000, representing a growth of 13.9% over the past year, with the highest sale price being $738,000. The median rental price is $440 per week
Warwick is in the midst of a transitional phase, a factor that has caught the eye of many investors. Many homes in the suburb are undergoing expensive renovation and some older properties are being demolished and replaced with modern buildings.
Of particular interest to investors is the fact that Warwick is part of the Joondalup Draft Local Housing Strategy, which aims aim to rezone parts of the suburb to allow for more dense residential housing. Large parts of the suburbs look set to be rezoned to R20/R40 or R20/R60.
According to our analysis, Warwick has a high demand-to-supply ratio, meaning demand is very strong compared to supply. Part of the reason is that it appeals to both owner-occupiers and investors. Owner-occupiers love the location, the amenities and the affordability. Investors love the price tag, larger lot sizes, and the ability to add value to old properties via renovation and development.
The Reserve Bank of Australia has decided to keep interest rates the same
The board met today and decided to keep the cash rate unchanged at 2.5 per cent. This is great news for investors looking for their next investment property.
“The latest housing market statistics are likely to have caused the Reserve Bank some additional deliberation at their latest board meeting,” said RP Data’s head of research Tim Lawless.
The amount of investment in the housing market would be causing them concern, Mr Lawless said.
“In Australia, the economy grew at a below trend pace in 2013. Recent information suggests slightly firmer consumer demand over the summer and foreshadows a solid expansion in housing construction. Some indicators of business conditions and confidence have improved from a year ago and exports are rising.
Glenn Stevens the Governor of the Reserve Bank said “resources sector investment spending is set to decline significantly and, at this stage, signs of improvement in investment intentions in other sectors are only tentative, as firms wait for more evidence of improved conditions before committing to expansion plans. Public spending is scheduled to be subdued. “
Mr Stevens said “monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates”.
Tax Newsletter – April 2014
Tax data net to be widened
The government has proposed to improve taxpayer compliance through new third-party reporting regimes and has undertaken public consultation to seek feedback on possible policy issues. The proposal aims to improve taxpayer compliance by enhancing the information reported to the ATO by a range of third parties. The proposal is currently scheduled to commence from 1 July 2014 (although first reports would not be due to the ATO until after 1 July 2015).
The government notes that some of the elements of the proposal can be implemented by the ATO, whereas other elements will require tax law changes. This would involve the creation of new third-party reporting regimes in relation to:
- sales of real property;
- sales of shares and units in unit trusts;
- sales through merchant debit and credit services; and
- taxable government grants and other payments.
In respect of these transactions, the government suggests that the ATO would initially seek to receive annual reports and then seek to move to quarterly, monthly or real-time reporting.
ATO compliance approach can be improved
The government has released several reports prepared by the Inspector-General of Taxation, Mr Ali Noroozi, into the ATO’s compliance approach to individual taxpayers.
The Tax Inspector found that data-matching was generally positively received where the ATO uses it to assist individuals. However, he found that stakeholders were concerned that the data used by the ATO could be inaccurate and not sufficiently vetted before comparisons were made with taxpayer-reported information.
In relation to the ATO delaying tax returns to check refund claims, the Tax Inspector recommended that the ATO improve its processes as well as communication with taxpayers. Among other things,
Mr Noroozi thought the ATO could better differentiate potentially fraudulent claims from mere mistakes. The ATO could also improve the time taken to review cases, and provide clearer reasons for any adjustments made.
ATO complaints-handling report highlights issues
The Australian National Audit Office (ANAO) has recently reviewed the ATO’s complaints-handling processes. Although the ANAO found that the ATO’s complaints-handling framework is well designed, it found that there are opportunities for the ATO to improve its practices, including by obtaining a better understanding of the issues that are the subject of complaints and the needs of the complainants themselves.
It said there is scope for the ATO to:
- improve reporting against complaints-handling timeliness measures;
- implement a more coherent agency-wide quality assurance framework for complaints and other feedback;
- restrict sensitive information about named ATO officer complaints from being included in records on the ATO’s client relationship management computer system; and
- implement measures to periodically check that ATO officers have not accessed client relationship records inappropriately.
The ANAO made three recommendations, all agreed to by the ATO, which are aimed at improving the ATO’s handling of complaints and its monitoring and reporting of performance in managing complaints.
No deduction for preparatory activities
Successful entrepreneurs are a creative and motivated bunch, but it generally takes several attempts to develop a successful business venture. Costs are quickly incurred in determining the viability of, and in pursuing, a business idea. However, careful consideration of the deductibility of such costs needs to be taken. If the idea is a winner and a new business venture is born, a deduction may be available. However, in other cases, the deduction may not be available.
In one recent case, an individual was unsuccessful before the Federal Court in relation to his claims for deductions incurred in pursuing 14 business ventures on a 500-acre property. The Administrative Appeals Tribunal (AAT) had earlier found that although the man’s operations met a number of criteria relevant in determining whether a business was being carried on, none of the activities had advanced much beyond the planning stage.
The AAT held that the individual was not “carrying on a business” and that the claimed deductions were therefore not available. The Federal Court affirmed the AAT’s decision.
TIP: Given the breadth of examples covered in this decision, the decision is a useful reference point for taxpayers dealing with the issue of deductibility of costs incurred in preparatory activities associated with a business idea that is later abandoned or a business venture not yet generating income. Please contact our office for further details.
Penalty for late superannuation contribution
The Federal Court has affirmed an excess superannuation contributions tax assessment issued to an individual after finding there were no “special circumstances” to warrant reallocating excess concessional contributions that had been received late via BPAY.
The Court heard that the bookkeeper of the individual’s employer had made two payments on 30 June 2009 via BPAY to the individual’s superannuation fund, and that those payment were received by the fund on 1 July 2009. The Court also heard that the bookkeeper had mistakenly made an early payment to the individual’s superannuation fund on 27 May 2010, which was meant for the following financial year.
As a result of these payments, the total amount of funds received by the superannuation fund in the 2009–2010 financial year exceeded the individual’s $50,000 concessional contributions cap for the year.
The individual argued that there were “special circumstances” and that the Commissioner should reallocate the two late payments to the 2008–2009 financial year, and the 27 May 2010 payment to the 2010–2011 financial year.
However, the Court said late BPAY payments did not amount to “special circumstances”. Further, simple errors such as making a contribution too early also did not amount to “special circumstances”. The Court was also of the view that the individual had been in a position to ensure that the contributions were made in the correct year.
TIP: A taxpayer who has contributed above his or her concessional or non-concessional contributions caps can apply to the Commissioner to exercise his discretion to disregard or reallocate excess contributions for a financial year. However, it should be noted that the discretion is not easy to obtain.
Individuals should consider keeping track of contributions and avoid making last-minute contributions that could be allocated to the next financial year. Individuals with salary-sacrifice arrangements should carefully identify the timing of superannuation payments relating to wages accrued for the June quarter (or June month). Please contact us for further information.
ATO eye on dividend stripping
The ATO has released details of “dividend access share” arrangements that it considers to be dividend stripping schemes under the tax law anti-avoidance provisions. These arrangements aim to allow ordinary shareholders of a private company and/or their associates to derive the economic benefit of significant profits accumulating in the private company in a substantially (if not entirely) tax-free form.
These arrangements involve a number of features, but principally include the company issuing a new class of shares to another entity (eg another company controlled by the original shareholders) for nominal consideration, and the company declaring and paying fully franked dividends on the new class of shares of an amount approximately equal to the accumulated profits in the company. The ATO says these arrangements generally result in a reduction or elimination of the taxation liabilities that would normally arise with the payment of dividends (that is, if those dividends were paid to the company’s ordinary shareholders).
The Commissioner is of the view that under such circumstances, he can exercise his power to cancel all or part of the tax benefit obtained from these schemes.
Finance Newsletter – March 2014
With house prices moving it’s even tougher for first home buyers to enter the market. If you want to assist a family member to buy their first home there are a number of thing you can do:
Provide a gift or loan
Offer equity in your own home as security
Use Commonwealth Bank or other banks Family Equity products.
Family Equity is a home buying solution unlike any other, designed to help first home buyers enter the property market. It’s a range of financing options that can help customers secure a home loan, repay a home loan, or a combination of both. The main customer benefit is the ability to enter the property market by relying on guarantors for security and/or servicing support.
A family member has always been able to assist with providing equity or funds for a deposit. What’s good about family equity is it also allows servicing support. This means that if an applicant’s income is not sufficient to service the loan required, a family member (or anyone for that matter) can assist by paying some of the repayments on an ongoing basis. The person providing the equity or servicing support is not required to be on the title of the property being financed. Remember there is a grant and stamp duty incentives from the State Government for first home buyers too.
Do you have the most suitable loan for your circumstances?
Do you have the best rate available?
If your interest rate is over 4.84% that you may be able to save thousands per year by changing loans and or banks. Homeloans is currently offering customers 4.84% variable for loans conditions apply. So if you are interested in saving thousands per year call Mercia finance to see if we can show you how benefit from a better rate.
If you have any questions about Family Equity, Reverse Mortgages or any other type of loan, call Dan Goodridge on 04144 233 40. Our service is free of charge to you the borrower and we have access to all the major lenders in WA.