The end of the Australian financial year is rapidly approaching so we wanted to put together an End of Financial Year 2018 checklist for Australian expats when it comes to your personal finances.
Whether you’re an Australian expat living and working abroad, or you’re an Australian resident, the tips and insights below will be just as valuable to consider for your own strategies.
1. Should you pre-pay interest on your existing loans?
If you have existing investment loans then you may want to consider whether it makes sense for you to prepay interest. This involves your investment-savvy mortgage broker agreeing with the bank on a fixed rate for up to the following 12 months, and making one lump-sum interest repayment today, instead of making these payments over the following 12 months. The benefit of such a strategy is to allow you to claim the tax deduction in this financial year, which can be particularly valuable if you’ve had a large capital gain in this particular financial year. If you’re an Australian expat, this could be from the sale of another investment property or other taxable Australian asset. If you’re an Australian resident, this could simply be your salary, bonus payments or capital gains realised on the sale of shares or other investment assets.
Be sure to seek professional advice from your accountant and/or financial planner on this strategy to ensure that it’s right for you and speak to your mortgage broker to secure an attractive rate.
2. Should you make any repairs or maintenance payments for your investment property?
Similar to the consideration of pre-paying interest, you may want to consider making repairs or maintenance payments on your investment property to potentially claim the tax deduction in this financial year. In Australia, you can generally claims repairs and maintenance that are simply to return the property to its original condition, whereas major capital expenses such as improvements to the property will generally increase the cost base of your property, which may prove beneficial at the point of sale of the property.
As in the first scenario, if minimising your overall tax liability in this financial year would be beneficial for you, then you may want to consider carrying out the required repairs or property maintenance in this financial year.
3. Should you refinance or review your interest rates?
This particular tip is not especially unique to the end of the financial year, but rather should form part of your annual personal finance review. Competition amongst the lenders, both for Australian expats and residents, continues to grow which may mean that you can secure a more attractive interest rate than you’re currently paying. Book your complimentary loan review with our team at Loansuite by clicking here and we will be able to quickly ascertain what the best options for you are.
You may also want to consider refinancing and utilising some of the equity you’ve built up in an existing property to expand your investment property portfolio. By structuring your financing correctly, you may be in a position to add another property to your portfolio without using any of your existing cash. When considering such strategies, it’s important to ensure that your financing is ‘clean’ and appropriate for you, particularly when it comes to maximising your tax deductions.
4. Should you adjust your property budget items?
Generally with most investment properties there will be a number of external providers involved such as an accountant, property manager and potentially other service providers such as a pool cleaner and gardener. When was the last time you sat down and reviewed the costs on each of these items? Are they competitive? Are you spending more than you need to be in some of these areas. The end of the financial year can be an excellent time to sit down with your investment property annual statements and review where you can be saving money.
LoanSuite Pty Ltd is your lending partner for all of your home loan, investment property, business and commercial financing needs. With our wide range of lending solutions, expertise in financial planning and investment strategies, and extensive experience in working with both Australian residents and Australian expats, we are your partners for your lending needs.
Book a obligation-free, complimentary consultation here today.
LoanSuite Pty Ltd is an Authorised Credit Representative (Credit Representative Number – 494608) of My Local Broker (Australian Credit License – 481374). Important Disclaimer: Your complete financial situation will need to be assessed before acceptance of any proposal or product.