What a great start to the new financial year if you are looking to buy your first home or investment property!Prices have progressively been dropping along Australia’s eastern seaboard and lenders are favoring borrowers who can verify their income and have stable employment.

If you are looking to buy your first home, want to stop paying rent or want to reduce your taxable income and purchase an investment property, I invite you to call us for an obligation free chat to discuss:

• Any general finance questions
• The maximum loan you can comfortably borrow
• What the monthly repayments would be
• The financial difference between rental payments and mortgage payments
• Any cash variance from rental income and mortgage repayments

It’s the perfect time to assess your options and consider getting into the property market - as it has been quite a while since properties have dropped in value and there are some wonderful loans currently available.

Tip 1.

Don’t pay ‘professional package’ annual fees, ranging from $340 - $390 every year for a slightly lower interest rate. Many loans exist which offer the same interest rates, similar features but without the annual fees. e.g. ING, Bankwest, Citibank, etc.

Tip 2.

If you are with a large bank, call us to ensure you are structured to receive the maximum discounts you are entitled to from that bank. Most people do not receive all discounts they may be eligible for from their existing lender.

Tip 3.

If your existing lender is looking shaky OR wants to exit the Residential lending market (e.g. Macquarie bank) OR has removed loan features due to funding issues, then it’s a great time to renegotiate the terms of your agreement and possibly have waived exit fees.

Tip 4.

Don’t cross securitise your properties with ANY lender as it removes flexibility and has numerous other ‘downsides’.

Tip 5.

Investigate the opportunities which now exist for your self managed superannuation fund to borrow and buy property.

Kind Regards.

Harry Pontikis

Chocolate Money
P:1300 137 539
M:0411 258 058
harry@chocolatemoney.com.au

The Victorian building industry is going through unprecendented demand for housing - people wanting to buy and rent properties. Coupled with this demand, property prices in Melbourne have flattened, with many areas dropping in price. This should signal a boom time for those involved in the building industry. Unfortunately, the big banks have stimied this potential growth in housing construction. They are captialising on the demise of their competitors, which have been forced to scale back lending due too the shortage of funds, as a result of the world wide credit crisis. The banks are charging higher fees and interest rates, with special focus on the self employed for more expensive loans. This has limited the amount of credit people have access to, and therefore also limited the amount of houses builders can afford (or are willing) to build.

The banks have also slashed commissions to finance brokers, hoping to drive them out of business. This strategy is meant to sure up the banks’ dominance even when the credit crisis eases, allowing competition to re - enter the market again. By decimating the broker channel, consumers will not have advocates to help them secure the most appropriate funding, but will be at the banks’ mercy to take whatever loan the bank bestows upon them.

Banks have been looking for any excuse to decline the self employed - including going back more than 10 years to see if there have been any previous credit issues and using this as a reason to knock them back.

Articles and interviews in The Age newspaper, The Financial Review, as well as the ABC, where Brian Welch (Master Builders Association Executive Director) and Harry Pontikis (Chocolate Money Director) clearly outline the changing landscape for builders and the self employed due to the banks taking the opportunity to increase their profits.

An Audio of the ABC coverage is available by clicking here

Small Business Loan up to $20,000

• Noproof of income required - (only 3 months bank statements)
• Quick approval(within 48 hours) and settlementcan occur within the week.
• Only 1 year ABN required

Terms and conditions apply:

* People with credit defaults are not eligible

Contactus on 1300 137 539 or email harry@chocolatemoney.com.au for a quick and easy loan.

This is the season when all the tax schemes (or scams) surface and are advertised profusely! All of these schemes profess to lower your taxable income before June 30.
Stop and consider is whether it’s worth spending money on a dodgy investment just to generate a deduction.

You need to make sure the underlying investment is sound and profitable. Negatively gearing a property or share portfolio or any other investment means you are paying money out of your pocket just to claim a fraction of that money back in tax.

Some tips you may want to consider now it’s ‘tax time’:

• Prepaying next year’s interest on investment loans.
• Look back at business assets (especially if you work from home) you have replaced during the year to see if you can claim the eligible months.
• Be sure to read the disclosure statement that comes with any Agri business product and check if the ATO has issued a product ruling outlining the tax treatment of that investment.
• If you have a capital gain, it may be worth selling shares that have made a loss to offset the gain.
• If you were considering undergoing self education courses, these may be tax deductable.

The ATO has spent the year ramping up compliance efforts for high income earners, has undertaken numerous crackdowns on wealthy individuals and issued a bucket of warnings against various tax schemes. Tax payers will need to take precautions to prevent a tap on the shoulder from the taxman after filing this year’s tax returns – particularly if they are wealthy and have income or assets overseas.

Overseas investments – There has been a huge crackdown on tax cheats using offshore accounts which sends a strong message to the community that individuals who hide income offshore and try to evade tax, will be caught.

High Net wealth – People who directly or indirectly control around $30m of assets will be carefully watched by the ATO. Things the Tax department will be looking for are: lavish lifestyles that can’t be supported by reported income, large variations in tax payments, unexplained losses and offshore transactions.

Data matching - in addition to data matching financial details, the ATO now cross checks interest data with banks and records of property sales to ensure capital gains tax has been paid correctly. They also data match for the purchase of collectables, racehorses, boats and planes.

Taxpayer alerts – The ATO has issued alerts which warn against tax schemes considered illegal. Including ‘wash sales’ where an individual sells shares or assets to achieve a loss but maintains control of the asset – either buying it back in a family member’s name or a Trust.

Division 7A – This is where taxpayers withdraw money from a family company but do not pay tax on it. The ATO will tax the withdrawn money as an unfranked dividend. Many taxpayers consider the company income as their own and don’t understand the tax obligations around the withdrawn money.

It’s the perfect time to conduct a financial ‘health check’ by calling us to have an obligation free consultation about your needs in the new financial year.

Kind Regards,

Harry Pontikis
Director
Chocolate Money
1300 137 539
0411 258 058

harry@chocolatemoney.com.au

The global credit crunch is effecting many small business in Australia. It’s getting harder to access money and larger companies are delaying their payments to smaller suppliers, causing cash flow issues.

Rather than risk ‘running out of money’ or needing to refinance your entire property debt to access equity, there are other options available through Chocolate Money and your existing lenders.

If you need access to a smaller amount of money for your business these are some options we can help you with:

• A Low Document Small Business loan / overdraft - only require 3 months business bank statements and an ABN which has been registered for 2 years.
• Attach a short term loan as a second mortgage on your existing mortgage.
• Access any equity from your property without changing loans or lender.
• Borrow on invoices which are owed to you.

Call us to help you finance small cash flow shortfalls easily and inexpensively.

Yours Sincerely,

Harry Pontikis

Director

Chocolate Money

1300 137 539

0411 258 058

harry@chocolatemoney.com.au