The Federal Budget 2018 – 2019 released and effects on property buyers and property investors

The Federal Budget 2018 – 2019 released and effects on property buyers and property investors

The Federal Budget 2018 – 2019 released and effects on property buyers and property investors

Published on June 30th, 2018

Milan Tojcic I Property investor and enthusiast

Director of Expert Mortgage Brokers I Head Finance Broker

 

Given the already proposed Budget that will be implemented since 1st July 2018 is not the most relevant and will not make much impact on investors but more so to first home buyers. It might be worth going through the changes anyway. Besides some small tax cuts to low to middle income earners, there are major changes to affordable housing. Whilst improving affordable housing Budget 18 – 19 will cut vacant land holders claiming interest costs where land is not genuinely held for earning assessable income. This year’s budget involves instant tax write off for small businesses for purchases under $20,000 extension.

 

Budget will largely focus on Aged care and mostly infrastructure improvement. Melbourne improvements to be funded for a rail line to Melbourne Airport. Some 14,000 Aussies will get their homecare packages with $1.6 billion to be used over 4 following years. In attempt to ease the congestion in Melbourne and other states, primarily focusing reliving commuters to Melbourne airport. There is $24.5 billion to be provided to infrastructure around Australia and about $5 billion towards rail line in Melbourne Airport. Hence the infrastructure is believed to improve property value in the somewhat near future potentially causing some property price hikes.

 

Most importantly this foundation of tax cuts is primarily funded by a crack down onto illicit tobacco, money laundering and certain sectors known to avoid paying tax like foreign companies using loopholes avoiding the tax office. So, the main foundation to this year’s tax cut will not be out of the Australians pockets but from ‘other avenues’.

 

The new budget will provide tax relief targeting low to middle income earners. So, the main winners in this budget will benefit from just over $10 per week or $530 per year that can only be claimed after June 2019. But in which tax bracket exactly? If you are earning up to $37,000 per year there could be up to $200 back in your pocket. Anyone on and up to $90,000 income bracket will get a maximum of $530 per year. The other tax savings changes will be the bracket not up to $87,000 but up to $90,000 and that rate is now 32.5% and not what used to be 37%. The 37% tax rate will be applied from the $90,000 income bracket. Some great tax benefits that can be used to incorporate to save for the first home buyers along with affordable housing in the following.

 

Housing with measures to improve affordable housing are on track with $1 billion to be provided for National Housing Finance and Investment Corporation and release of more land for affordable housing development. In attempt to address affordable housing concerns the new budget will focus on claw-backs via people claiming interest costs relating holding vacant land where land is not genuinely held for earning assessable income.

 

Hence, the overall budget will not be the most significant to property buyers, property investors and especially the first home buyers. However, in some instance the expansion and focus on affordable housing can improve the household savings. That is to provide a chance for first home buyers to save for their first house by paying cheaper rent.

 

Once you’re ready to further inquire about a loan and if you like to further discuss the new Federal Budget, a mortgage broker can help you make a more informed decision about which loan to choose. With a lot more, loan products than ever before on offer from a variety of lenders – you can receive loan information that will provide you with a much more informative position and make your decision easier when the time comes. So, contact your local Expert Mortgage Broker and enquire within.

A hidden significance, white-label loans are a lot more than just a good rate loan

A hidden significance, white-label loans are a lot more than just a good rate loan

A hidden significance, white-label loans are a lot more than just a good rate loan

Published on June 11, 2018

Milan Tojcic I Investor Enthusiast

Director of Expert Mortgage Brokers I Head Finance Broker

 

For those unfamiliar with white label loans, a hidden significance, greater than is first apparent – in essence a white-label loan is basically a home-branded loan. Like any of your favourite home-branded products you can find in supermarket aisles there is a hidden significance – the white-label loan is more than a low rate loan. White-label products are high quality and are usually developed by the most influential of lenders in the markets – they are just packaged with less and hence appear with less significance but, do come with a very sharp and competitive offer.

 

White-label loans, like any while label grocery product is available in supermarkets, are available through mortgage brokers. Popularity of while label loans has grown mainly in the last decade. Their popularity has grown so much that majority of brokers offer while label loans. And, as white label loans have grown in demand, that’s slowly reflected onto the quality of their product and service overall in the market. Hence, white label loans have developed over time into something much more than price, with high focus on flexibility, service and quality of the product.

 

Elasticity – White label will offer choice

Like in range offered by big four majors in white-label offers variable interest rate, fixed or combination of both rate loans. Their suitability will range for many home-buyers looking for a no frills, simple mortgage product. White-label mortgage products will offer access to loan features like redraw, debit card access and internet banking facility. That way there is no need to be concerned with paying for all the extras that many borrowers will never need in home loans.

 

Facility – White label loans offer swift and professional service

Customer service is what distinguishes the products in white-label home loan market. Deciding on which home loan to choose available can be the biggest financial decision in a life time. Hence, who better to go to than a mortgage broker. Nevertheless, some still feel that if there is no face to face person than customer service is slower and not as professional. With white-label loans, brokers have knowledge and access to the white-label lender support and can offer, in most cases, quicker support than a lender might. Most of the time an unconditional approval can be obtained with a broker through white-label product than any other major lender in the market. That way dealing with a broker can result in quicker and more suitable loan product, not to mention quicker service levels with having the expert on your side.

 

Value – White-label loans offer like any lender might with lower cost involved

Basically, white-label features offer the same facilities as any bank-lender might, only with lower cost. Products value, elasticity and facilities involved remains the same, and not to mention the popularity of white-label loans growing only goes to say that borrowers are getting the opportunity and benefits of this loan product.

 

Once you’re ready to further inquire about a loan and if white-label something you are considering, a mortgage broker can help you make a more informed decision about which loan to choose. With over a lot more loan products on offer from a variety of lenders – you can receive loan information that will provide you with a much more informative position and make your decision easier when the time comes. So, contact your local Expert Mortgage Broker and enquire within.

Property Investors and new 2017-18 Federal Budget – How will the Federal Budget 2017-18 affect the property investors?

Property Investors and new 2017-18 Federal Budget – How will the Federal Budget 2017-18 affect the property investors?

By Milan Tojcic

More and more Australians love property investment for many reasons, including long history of sound returns, building wealth, population growth, very well-reported housing undersupply and ongoing infrastructure development indicating some highly desirable ticks. This however has been known for a while and Australians are quite the fans of property investment over generations now.

Now given the competitive market, and current historic low rates and a free consultation from an Expert Mortgage Broker, there has never been a more momentous time to consider revising your investment strategy, recalculating and reviewing your property investment loan to get maximum returns.

This is where I’d like to put a picture of something, like houses or something. Property investors or just a basic picture of units in an unknown street. Or just a business attire person purchasing property.

The most recent Federal Budget 2017-18 has implemented some changes that may sting the property investors. Changes include scraped tax claims made for visiting investment properties they owned; some tightening on depreciation deductions for investment properties; and property developments will be capped at 50% for foreign ownership.

Also, purchasers of newly constructed residential properties (or new subdivisions) will be required to remit the GST directly to ATO as part of settlement; and from 50% to 60% CGT discount will be passed onto investments in ‘affordable housing’ thus encouraging more ‘affordable housing’ investments.

As parallel measure to aid first home buyer are displayed in the new budget 2017-18, property investors have been hit with a few cutbacks. So are they going to affect the long run residential investors, highly unlikely.

Property investors will be scraped off for costs incurred for travelling to their investment properties and back. So as off 1 July this year the right to tax deductions by property investors to their property investments and back will be completely removed.

Next will be tightening on the depreciation deductions on investment properties with a plan to no longer allow second property owners to claim deductions on items purchased by already previous property owners.

The other government act by the budget is that it will impose a limit to the percentage of foreign ownership in new property developments. By limiting the percentage ownership of foreign property investors in new property developments to 50%, the government is hoping to increase the supply in the domestic market.

So far, the GST on newly developed property was something that the builders were supposed to pay for once the property is built. However; because the government was having trouble chasing the builders to make due payment on their GST, they decided to transfer the cost onto the purchaser. So, going forward, after 1st July 2017, all newly developed residential properties will be passed onto the purchaser on the settlement date.

The new 60% discount for investments in ‘affordable housing’; this scheme is a totally new concept that’s meaning hasn’t been entirely clarified and the government is yet to produce a full definition of it; but it sounds good if there is a chance for property investors to be motivated by it and start purchasing and leasing more ‘affordable housing’ investments. “Below market rental cost” is the current definition of ‘affordable housing ‘and property investors might be enticed to look for some properties with good capital gains to make it worth their while.

Will this affect the markets and property investors in a positive way regarding residential property investors?

Perhaps in the short run but in the long run the markets in Australia have provided solid returns in the past and highly unlikely will it affect the local property investors by a great deal.

Want to find out some more information about the property investment options and talk about the current market climate trends. Contact a professional financial adviser, or speak with an Expert Mortgage Broker.

Therefore, biggest decisions in life should be done right, choose nothing but the experts on your side.