This month, we’re talking about 4 things that might affect your property and finance interests after the election;

1. Why the ATO has its sights set on property investors.

2. Big changes that let borrowers get approval easier.

3. Pre-election property snapshot - where to from here?

4. Take advantage of the way banks fund home loans.

If you need to have a chat about your finances, I'm always available!

Call me now on: 0402 408944  

Property Investors, beware of the ATO

Tax time is coming and if you own an investment property, the ATO has said they’re going to be looking much closer at your tax returns this year.

According to the ATO, a random sample audit found 90% of tax returns submitted by property investors contained errors. The ATO has since announced that they will double the number of audits related to rental deductions.

The best person to speak to about your tax return will obviously be your accountant.

If you need some help looking at the interest payments on your investment loan or want to make some changes, give me a ring as soon as possible to make sure you don’t get stung.

APRA Changes Make Life Way Easier for Borrowers

In a move that’s going to make it easier for everyday Australians to qualify for a loan, APRA has recommended banks scrap the 7 percent buffer used to determine if someone can afford a loan.

So how does this help buyers?

When you apply for a loan, banks put customers through a 'serviceability test' to make sure they can afford a higher interest rate. Customers have to demonstrate that they could still make repayments if rates rose to as high as 7 percent.

However, this 7 per cent figure is almost double what most interest rates are today, which is simply not realistic.

If you’re looking at getting a loan soon and want to talk about serviceability let me know.

A Property Snapshot from Before the Election

With the election over and some certainty around negative gearing, franking credits and other tax reforms, it will be exciting to watch the property market over the next 12 months.

As you can see above, before the election, almost every property market in Australia was in a downturn monthly, quarterly and yearly.

How do banks fund their home loans?  

The important one for you is domestic deposits, which is the cash people and businesses have in their bank accounts.

An interesting chart from the RBA shows that of these main sources, banks now get about 60 per cent of the funding from domestic deposits, up from 40 per cent a decade ago.

Banks use domestic deposits as they usually are the cheapest investment option, giving them better margins as interest rates fluctuate.

Effectively, an offset account reduces your overall loan amount so you’ll be paying less interest, while allowing you to access the money at any time.

I have a lot of experience with offset accounts so if you’d like to understand more about how offset accounts can help you save thousands, please call me anytime.