An Update from Genworth

As part of Genworth's commitment to Australia's economic recovery and supporting Australians realise their dream of homeownership, we wish to advise that effective today, Genworth will be accepting the HomeBuilder grant under current product parameters.

Genworth will monitor the policies established by the Federal and State governments and will provide further details as required.

Please refer to the table below, and the current Underwriting Standards and Guidelines, for clarification:

Genuine savings

Genworth currently allows the use of the First Home Owners Grant (FHOG) as an eligible deposit source, where borrowers have not held the required 5% deposit for 3 months, and they are submitting 3 months of satisfactory rental payment history to support their application. Genworth will now allow the use of the new HomeBuilder Grant where borrowers meet the required criteria. Genworth will accept either or both FHOG and HomeBuilder. Refer Section 8.1 of our guidelines for details on Genuine Savings.

Non-genuine savings

HomeBuilder Grant is classified as non-genuine savings.

HomeBuyer Plus product

The HomeBuilder Grant is not available under this product as construction and home improvements are not applicable loan purposes.

New Tax Year Approaching

With the new tax year fast approaching, many taxpayers will be seeking to boost their cash flow due to the dire economic consequences of the coronavirus pandemic. Only last week, the Federal Treasurer Josh Frydenberg confirmed Australia is now in a recession, ending 29 years of uninterrupted economic growth. Boosting cash flow is therefore critical in these challenging economic times and a simple way to do this is to ensure that generous tax depreciation benefits are fully claimed. Individual Australian property investors are potentially missing out on thousands of dollars in potential tax deductions each year by not claiming their full tax depreciation entitlements.

Many Australian property investors may not know that a tax depreciation report undertaken by a professional tax depreciation company can identify hundreds of items in an investment property for which you can claim legitimate depreciation benefits.

As we about to enter a new tax year, owners of investment properties in Australia can significantly boost their cash flow by claiming these tax deductions on a large number of various household items through depreciation benefits.

Some of the legal, yet often neglected deductions include:

  • Pumps attached to spa baths and Swimming pool filtration systems
  • Free-standing spas
  • Water tanks
  • Built-in coffee machines
  • Children's cubby houses qualify as valid deductions.
  • Solar Panels
  • Clothes Lines
  • Security Systems

It may also surprise many property investors that even garden gnomes can be depreciated for tax purposes. Under taxation ruling, TR2006/15 garden gnomes can be depreciated for tax purposes as plant over their economic life. The tax benefits associated with negative gearing can be very significant with DEPPRO clients achieving tax benefits obtained through depreciation equivalent to 60% of the total purchase price of the property. In some cases, these tax benefits can total $300,000 based on a purchase price of $500,000. To qualify for these legitimate tax deductions, an investor must have a fully compliant tax depreciation company undertake an onsite inspection of the property and then compile a depreciation report based on this inspection.

Estimates of tax depreciation benefits for an investment property made from an office desk will not be accepted by the ATO.

Depreciation is a complex area of taxation that requires a professional company to undertake a depreciation report because of constant changes in rules. The ATO is now taking a more aggressive approach to tax deductions made by residential investors and has asked a large number to provide more details about their claims relating to property investment. Property investors should check that the company undertaking their tax depreciation schedule is a member of The Australian Institute of Quantity Surveyors (AIQS).

Employing a company who is a member of AIQS such as DEPPRO gives protection to consumers that their tax depreciation report complies is completed in a professional manner.

Deposit Power Update

The government's new stimulus, the HomeBuilder program, has created a renewed interest in house & land packages and is breathing life into the residential property market.

If your customer is purchasing a house & land package and doesn't have access to a cash deposit, Deposit Power might be able to help.

Deposit Power Guarantees can be used instead of the cash deposit, making it the perfect tool to help your customers secure their property quickly and easily.

Make this your competitive advantage!

Apply now!

Platform Finance Update

To ensure that the lenders cut-off times for settlements and applications for EOFY are met, please refer to the dates and timing below for applications to Platform Finance.

Their team will endeavour to assist with applications and settlements received outside these timeframes. Each scenario will be reviewed on a case-by-case basis.

Please ensure your settlement is submitted back to your settlements officer with all supporting documents. This will enable a timely settlement for your customers.

New Applications Cut-Off Date

5 pm AEST, Friday 19 June 2020

To guarantee Settlement before 30 June,

docs are required by

5 pm AEST, Thursday 25 June 2020

Platform Finance has been in consultation with the Commercial Asset Finance Brokers Association (CAFBA) to make representation to the Department of Treasury to extend the EOFY IAWO cut-off date for the financial year 2020. Whilst a decision is yet to be made, we will keep you abreast of any further developments in this regard.

Bluestone Winter Campaign

Bluestone has launched a winter campaign on the 15th of June. It includes a lot of changes across rates and policy.

A quick recap:

Rates have dropped across most / all products and LVRs

There is a promotional offer from 15th June to 31st August - we will waive all Prime P&I, Owner Occupied establishment fees ($590). This does not apply to Near Prime, Specialist or Specialist Plus

Please see the attached PDF for details!

Best Interests Duty Delayed

Following the government's announcement of a six-month deferral to the implementation of commitments associated with the royal commission on Friday afternoon, ASIC confirmed that mortgage broker best interest duty and remuneration reforms were among the measures which have been postponed to next year. The commencement date for the mortgage broker reforms has been delayed until 1 January 2021.

While ASIC deferred the start date to enable industry participants to focus on "immediate priorities" like the needs of their customers during this difficult stage, the regulator clearly stated it expects relevant parties will continue to actively prepare for the incoming change even with the extended timeline.

ASIC released the draft guidance around best interests duty on 20 February 2020 into a one-month consultation phase; working off the feedback received over the period, ASIC is aiming to release the final guidance on the reform by mid-2020, "in response to industry requests for that guidance to be finalised as soon as possible".

The government's broad, updated timetable for the royal commission recommendation implementation has all measures which would be introduced into parliament by 30 June 2020, now to be introduced by December 2020; similarly, the measures scheduled for introduction by December 2020 have been pushed back to 30 June 2021. The decision aimed to strike a balance between the need to implement the recommendations and the need to ensure Australia's financial institutions can devote their resources to responding to the significant challenges posed by COVID-19.

Source: Broker News