If you’ve had a capital gain this year, or for whatever reason expect your last dollar of income to be taxed on a lower marginal tax bracket next year, you may want to consider paying interest in advance on any investment loan/s you may have remaining. Legislation allows us to pay up to 12 months in advance, thus claiming the deduction immediately which can save a stack of tax.
Your rate would need to be fixed during the period so you can exactly pay it in advance. The banks also offer a slightly better rate in lieu of getting their hands on your money upfront. For example, St George Bank will give you a discount of 0.2% applied to the standard 1-year fixed rate.
Investors with a top-notch mortgage broker or accountant would have had this opportunity flagged by now, but not all. If you can think of any friends who may have recently sold an investment property, they might be thankful for your suggestion.
It’s also the time of year to chat with your financial advisor. If you’re self-employed, are you thinking about getting some money into your Super prior to June 30th – the tax break can be money for jam. Just get the right advice from a professional that will appropriately consider your unique circumstances and objectives. If you are employed, you could consider a regular ‘salary sacrifice’ that can do the same trick. If you haven’t been doing this, there’s always next year (financial year).