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WEALTH MAXIMISER - INVESTOR ASSIST UPDATE - JUNE 2008 |
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The ATO has recently published an edited version of a Private Ruling on its website: http://www.ato.gov.au/rba/content.asp?doc=/rba/content/81797.htm
A taxpayer and client of Austral Mortgage, applied for the private ruling to seek confirmation from the ATO that if there was a shortfall between his investment income and his investment outgoings then that shortfall could be capitalised under the home and investment loan & line of credit structure noted in his application.
The Ruling notes that in the circumstances outlined in the application, and on the basis of the loan contracts provided which "form part of the ruling", the taxpayer is entitled to a deduction of interest expenses incurred on the investment line of credit and that the anti-avoidance provisions of Part IVA will not apply to deny the deductions for interest incurred.
In the current environment where we are experiencing high interest rates and uncertainty as to their future direction, as well as declining or flat property values in NSW, a capitalising investment facility allows investors to better manage their cash flow, and if desired, enables them to use personal income for personal lifestyle / personal debt repayment as opposed to having to subsidise any shortfall they are experiencing on their geared investments. Further, the ability to capitalise interest provides options to an investor including holding their property pending a forecast upswing in values.*
WEALTH MAXIMISER INVESTOR ASSIST - Rates as at 28/01/09
| Home Investment Term Loans |
Rates |
Comparison Rate |
Variable
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6.80% p.a
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6.83% p.a
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Fixed 3 Years
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6.45% p.a
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6.73% p.a
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| Investment Line of Credit |
Rates |
Comparison Rate |
Variable Only ($345 annual fee)
Variable Only (no annual fee) |
6.95% p.a
7.10% p.a. |
N/A
N/A
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Initial Set-up Fees
Application Fee
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$350
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Valuation Fee
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As quoted on each property
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Lender's Legal Fees
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As quoted
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Contract Fee
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$150
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For further information on the loan product call us on 02 92991833 OR enter your details via the form below and we will get back to you within the next 24 hours.
* BIS Shrapnel’s latest report notes that by mid-2011, the median Sydney house price will climb from $560,000 to $650,000 - A senior economist at the firm, Jason Anderson, said the price rise would be spread across the city, helping cut the gap between Sydney's two-speed property market.
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