RBA holds cash rate: are you getting the most out of record low rates?

   

Hi there,

RBA leaves rates on hold
After cutting the cash rate to a new low in May, the Reserve Bank of Australia (RBA) has decided to leave the rate on hold.

With consumer sentiment looking more positive, and unemployment remaining low, there was no need for the Reserve Bank to change their monetary policy setting this month.

While the cash rate was left on hold at 1.75%, many of Australia’s lenders have only just passed on last month’s rate cut – taking home loan interest rates to new historical lows.
 
There are a number of ways you could be taking advantage of these all-time low interest rates. You may be able to reduce your home loan repayments or put strategies in place to pay your home loan off faster.

If you’re thinking about buying a property, renovating or investing, now is a great time to get your finance organised.

Give me a call today and we’ll have a chat. It would be great to hear from you.

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Sean Willett
02 9586 2349
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Maximise your tax return*

With tax time right around the corner, now is the perfect time to start thinking about your finances and what tax breaks you may be able to claim.
 
Regardless of whether you are a homeowner or property investor, there will undoubtedly be a few property expenses that you may have forgotten about or didn’t know you could claim.
 
Homeowners
For homeowners, if you work from home or spend a lot of time on the road, you may be eligible to claim multiple expenses.

  • Home office: If you work from home, you should be able to claim some of the expenses you incur, such as phone, internet, heating, lighting and depreciation of equipment. The amount and extent to which you can claim deductions depends on a number of factors, so it pays to speak with your accountant.
  • Mobile phone: If you make work related calls on your personal mobile phone, you may be able to claim these as a tax deduction. Of course, if you are going to claim work-related calls made on your mobile as a tax deduction, it is important to do it the right way. Make sure you keep a log of the work related calls you make or review your monthly statement and look at the percentage of work-related calls you make.
  • Vehicle: If you travel for work, you may be able to claim your travel expenses as a tax deduction. You can claim vehicle and other travel expenses directly connected with your work, but generally you can't claim for normal trips between home and work – this is considered private travel.
 
Property Investors
If your property is used to earn rent, you are eligible to claim expenses relating to the maintenance and upkeep of your property. These deductions could include:
  • Advertising for tenants: Typically, costs associated with the advertising of your property in the newspaper or online can be claimed as a tax deductible expense.
  • Travel: Travel expenses to view, maintain or inspect your property can often be claimed as tax deductions, no matter whether it’s a simple 20 minute drive, or an overnight stay somewhere.
  • Maintenance: Property repairs and maintenance can be claimed as tax deductions, however, it’s important to refer to the Australian Taxation Office to check what expenses must be claimed at the time of repairs and what can be claimed at the end of the financial year. 
  • Real Estate Agent Fees: Fees pertaining to the use of property agents, as well their commissions, can be claimed as a tax deduction. The fees paid to agents are usually a percentage of your rental income, which would allow you to claim the majority (if not all) of the commission paid to the agent.
 

How a granny flat can help you build your wealth

Over the last few years, granny flats have become increasingly popular with savvy homeowners and investors. 

With interest rates sitting at record lows and vacancy rates slightly above 0% in most capital cities, it isn’t surprising to see an increasing number of Australians calling out for cheaper, ideally located accommodation.

Granny flats are no longer just for grannies!
Over the last few years, granny flats have become increasingly popular with homeowners and investors as they are a great way to build a tidy supplementary income.

With so many granny flat styles and designs on the market, a granny flat no longer has to be a makeshift rumpus room attached to the house. Today they can be entire homes on the same block of land as the primary home!

Key considerations for granny flat investors
Of course, if you are thinking about building a granny flat for investment purposes, there are some key things to consider first.
 
Legal and financial requirements: Regulations regarding construction and occupancy vary from state to state and council to council, so it pays to do your due diligence and make sure you are working within the right parameters.
 
Financing: Some lenders will restrict the loan size for a property that is set to be built on land that already holds another dwelling. That said, there are still plenty of financing options available.
 
Services: It’s important to have a solid plan for connecting storm water, sewer, water and electricity to the dwelling. Connecting these services to a granny flat can be complicated and expensive, so make sure you’re clear on what’s involved.

If you are considering building a granny flat, I can help you look at your financing options to find a loan that’s right for you. So please don’t hesitate to give me a call.

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Sean Willett
 02 9586 2349
  sean.willett@mortgagechoice.com.au
  http://MortgageChoice.com.au/Oatley1
 
Posted in: Home loans

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