Lender Update - Deposit Power

Due to the changes to the real estate industries operating environment and the high likelihood of this negatively impacting property transactions and house prices, Deposit Power has amended its 'Home Equity' qualifying rule.

There is no change to the equity requirement for guarantees above $100,000. It remains at 3 times the deposit amount.

The 'Funds to Complete' method of qualifying for a Deposit Power guarantee also remains unchanged. This requires the purchaser to demonstrate they have the financial capacity to settle - which includes an unconditional loan approval (subject to valuation only) and the funds to complete the purchase.

Please refer to the Deposit Power fact sheet on depositpower.com.au.

The new equity requirement for Short Term Deposit Guarantees up to $100,000 is 2 times the deposit amount.

Flexi-Options Rate Reduction

Here at RESI, we understand that this is an extremely difficult time for brokers and clients. We have already announced that brokers will continue to receive trail on any existing RESI loan which enters a repayment holiday due to this pandemic.

We are proud to announce that we have reviewed and reduced our Flexi Options rate across the board! Our variable rates start at 2.77% and our fixed start from 2.39%. all our loans, fixed or variable, have the option of linking a 100% offset account for just $10/pm.

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Memory from Byron Bay Conference

The Byron Bay Conference was a great success despite the challenges.

Bank of Sydney would like to extend their thanks to the Vow family.

In the bustle of things, we would like to remind you of their special 'ResiSec' offer for SME clients.

So if you have a prospect or customer that can use their Residential property as security for a Business Loan here's the deal:

Business ResiSec Loan

Interest Rate 3.99% (variable)

  • No application fee
  • Valuation & Legal fees of up to $1,500 covered by BOS
  • LVR up to 80%
  • Term: Up to 25 years (Principal & Interest)
  • Small monthly account keeping fee of $20

They also have an overdraft available at 4.55% (variable).

WARNING : This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Equipment & Finance Leasing Update

Just a friendly reminder that Vow have their national loan specialists who are only an email or phone call away.

For any of your clients seeking guidance on these loan products given the current market conditions, certainly, feel free to contact Glenn Mitchell on 0424 377 572 direct as needed relating to Commercial & Leasing loan products!

Start unlocking new opportunities to grow your business!

Business & Equipment Finance Brochure

Tax Depreciation Benefits

Many landlords throughout Australia are now under growing financial pressure because tenants are losing their jobs in the thousands and struggling to pay rent due to the economic impact of the Coronavirus.

At the same time landlords, themselves are being directly impacted by many owning small businesses that have been closed by the virus while other landlords who are employed have also lost their jobs.

This rising financial pressure on landlords has further intensified with the government announcing that tenants cannot be evicted from rental properties for the next six months at least.
Many landlords are so desperate now that more than 10,000 of them have asked Australia's largest lender to freeze their mortgage repayments in response to a ban on evicting tenants who fall behind on rent.

The Commonwealth Bank has said 43,000 mortgage customers had opted to defer payments so far and a quarter of these requests were for investor loans.
It is fair to say that the Australian economy will soon enter a recession because of the impact of the coronavirus, and this will make things even worse for landlords.
While falling interest rates may give some relief to property investors, the outlook for the property market in many capital cities is becoming more challenging and as a result investors need to utilise every tax benefit they are entitled to so they are put under any undue financial stress.

For example, it is still a fact that a large proportion of Australian property investors fail to claim their full tax depreciation benefits that can equate to 60% of the purchase price of a property.
In dollar terms, if you bought a new apartment for investment purposes that cost $500,000, these total tax depreciation benefits could amount to a massive $300,000.
The typical cost of a tax depreciation report is around $600 which is also tax-deductible making it a great investment for astute property investors.

Tax depreciation on a residential property is a deduction against assessable income allowing the owner to reduce the amount of taxation payable.

An investor is able to claim for two distinct types of depreciation on buildings. The first is Capital Allowance which is a deduction based on the historical construction costs of the property and may include surveying, engineering, architectural and building fees. The second is Plant and Equipment which includes items such as floor coverings, window treatments and fixed equipment i.e. cookers.

Most investors do not realize that tax benefits obtained through depreciation can be equivalent to 60% of the total purchase price of the property.
You should engage the services of a tax deprecation company that will undertake an inspection of your property and provide you with an ATO compliant tax depreciation report which you can provide to your accountant. This report is a 'once-off' and will outline the number of tax benefits you can claim on an annual basis. Anyone considering employing a tax depreciation company should ensure that they are a member of the Australian Institute of Quantity Surveyors (AIQS).

DEPPRO estimates that only one in five residential investors make use of the tax depreciation entitlements which are available to all investors on all investment properties.
Many property investors who have owned their properties for several years and have not undertaken a tax depreciation schedule still have the potential to claim back thousands of dollars in tax depreciation benefits.

A depreciation schedule can be undertaken at any time by a property investor. If you own a property for several years, you can still undertake a depreciation schedule and put in an adjusted tax return to enable them to obtain unclaimed tax depreciation benefits.