A 2 min read could save you a fortune.

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So glad I got your attention i’ll get to some juicy lending-related advice soon, but first here are some important tips for you:

(1) .au Domains will soon be up for grabs to the general public

Next month, all .au emails will be available for all. But these .au domains are available NOW for those of you that already have second-level .au extensions like .net.au or .com.au

Because I already have iChoice.com.au, I was able to get iChoice.au

So be careful!

If I didn’t do that, someone who owned iChoice.net.au could have snagged it.

More info can be found at auda.org.au

If you’d like to use my IT guy for your domains or anything else, Adrian’s just upstairs in our office and can be contacted on [email protected]

In my opinion, give it 5 or 10 years and most emails won’t have the ‘com’. My email will be [email protected]

(2) Discretionary Trusts Targeted By The ATO

Those who operate a business through a family Trust would have been advised by their accountant by now about the massive crack-down announced by the ATO.

You need to stop allocating distributions to your adult kids to soak up their smaller tax brackets.

The argument that they didn’t take the cash as they’re paying you back for ‘bringing them up’ won’t cut it, and the ATO are saying that’s always been the case.

Medical professionals are of course bound to book all their income in their personal name due to the PSI Rules (Personal Services Income). But where they have a business, their ’service trusts’ will still be able to exist, and I haven’t heard anything about crackdowns on distributions to bucket companies, whoops sorry, I mean investment companies.

(3) Buying a property with your partner

Jointly I made the mistake of buying an investment property with my wife jointly (as opposed to Tenants in Common). I don’t feel silly, because 80% of people do the same thing.

The good news is my Estate Planning solicitor is fixing it up – it doesn’t cost anything…

The last thing my wife would want in the event of my death is another $13,000 in Land Tax to pay every year. And if one of my kids ever wants to own that property to live in, they’d need to buy it off Tina and pay $52,000 in Stamp Duty; and yes, a Capital Gains event would take place ~ far out ~

‘Testamentary Trusts’ can facilitate Generation-Skipping.

And they last 80 years! So, the assets we leave to our kids will be protected until they’re around our age (sorry, my age).

I also have an old MLC Life Insurance Policy where my wife was noted as the Nominated Beneficiary. Kurt also made me change that, to instead be ‘my estate’.

(4) Little bugs

Now that we’re not using plastic bags anymore, those a bit unprepared like me bring groceries home in a box.

That’s not a problem, but when you get home and empty it, you might want to then take it outside. Sometimes there can be tiny bugs or even their eggs hidden in the cardboard.

It’s not a massive issue; it can’t really be helped when these boxes might have sat in a gigantic warehouse for a while. My Pest Control guy told me this.

(5) Luxury Car Tax Threshold increased

Luxury Car Tax (LCT) is 33% of the sales price of a vehicle that’s over the GST-inclusive threshold of $84,916, having recently increased from $79,659.

It’s not the fairest tax in the world; it was first introduced to protect our local car manufacturing industry, but umm, isn’t that gone now?

The LCT value of a car includes the value of any parts, accessories and attachments supplied at purchase. If you choose to add the Triple Hoop Bull Bar to your SUV for $3,000, that’s fine. But just know that if you install it a month later on the cars first service, it’ll only cost $2,000.

(6) Hire Car Excess

I rented a car at Gold Coast airport last week and was of course asked if I wanted to pay an extra $45 per day to reduce my insurance excess down from $5,000.

I said ‘no thanks’, knowing that because I paid with my Credit Card, the excess would be covered in the event of an accident.

Before you trot off on holiday, please know what your credit card does and doesn’t cover. Be prepared! The car rental place will NOT prompt you.

For an extra $10 per day, they offered me an upgrade! I got a Prado…felt like I was driving a truck! At the airport, ask for an upgrade!

(7) Basic Home Loan Vs Packaged Home Loan

In the good old days, banks wanted you to pay $395 every year for your home loan package, which covers multiple loan splits, provided one of more offset accounts and a fee-waiver for one of their mid-range Credit Cards.

CBA Wealth, ANZ Breakfree, Westpac Advantage & NAB Choice

Taking a ‘package’ got you a cheaper discounted interest rate, as opposed to their ‘no-frills’ basic loan.

… the other thing was that if a Refinance Rebate was on offer, you had to sign up to pay the annual fee in order to get the cash.

Banks love fees. This income doesn’t require them to use capital to make money. It’s hitting their P&L without being filtered through their Balance Sheets.

Anyway, this year, everything has turned upside down!

Dr. Diana had a $1.2M home loan (with $100K in offset) that she wants to extinguish as fast as possible, at the best rate.

The $4,000 Refinance Rebate was also enticing, which after the cost of switching banks (which amounts to around $700) still means a $3,300 net cash benefit.

We went through the interest rate options from the Big 4 Bank that suited her the best, and the basic rate of 3.49% was better than the packaged rate of 3.74%!

These rates sound high, I know. But that’s because of the recent RBA rate hikes. Prior to the recent rate rises, the rates quoted above were 1.74% and 1.99%~!

The 3.49% rate is a discounted rate for 2 years that will then need to be re-negotiated, but for those financially represented by us, this will be automatic.

She really wanted the 3.49% rate, but also insisted on an offset account! She also asked for a $300K facility in case she needs it next year to lend to her SMSF.

Using her home as collateral, we lodged two applications, splitting her home loan into A & B, to get the best of both worlds.

Frequent Flyer

Next month I might explore Land Tax, which is looking like it’s getting worse. If you own investment properties inside and out of Qld, your annual land tax bill could increase by about $9,000. Ouch.

That’s because Qld will now look at the value of your investment Land in other States as well, so many will lose their threshold.

interstate properties and land tax screenshot

What’s scary about this is that I don’t think it will be too long for other states to jump on board. Let’s see ~

 I’m only here half of October so if you’d like me to review your lending, it’s best we speak now – or later on in November 🙂

 Have a happy Friday and a lovely weekend,

 Yours financially,