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First Home Buyer Super Scheme

Super Opportunity for First Home Buyers

 

Legislation has passed that will enable eligible first home buyers to save for the deposit in the concessionally taxed superannuation system, using the First Home Super Saver Scheme (FHSSS or scheme).

This scheme may help participants to accumulate a larger deposit when compared to saving outside super.

The Government has produced an online estimator to illustrate the potential benefits of using the FHSSS. It compares making pre-tax super contributions with saving the same amount (less tax at personal rates) in a standard deposit account.

The estimator can be found at www.budget.gov.au/estimator/

Key Dates

Contributions can be made to the scheme from 1 July 2017 and withdrawn from 1 July 2018.

What & how much can you contribute?

Only voluntary contributions you make to super will count towards your FHSSS balance.

Voluntary contributions include personal, salary sacrifice and additional employer contributions, but not compulsory employer contributions (such as Superannuation Guarantee) and certain other amounts.

Voluntary contributions are limited to $15,000 per year and a total of $30,000. These contributions also count towards the existing contribution caps.

How much & when can you withdraw?

Withdrawals are capped at $30,000 plus associated earnings. The Australian Taxation Office (ATO) will calculate the associated earnings based on a formula, not the actual earning rate. They will also determine the amount that can be released after allowing for applicable taxes.

You can withdraw from the scheme before you have found a place to buy, but you'll need to buy within 12 months of withdrawing. If not, the ATO may grant a 12 month extension.

Who can participate?

To participate in the scheme, you generally need to be aged 18 or over, have not used the scheme before and have never owned real property in Australia. You may still be eligible if you plan to purchase a home with a partner who doesn't meet the criteria.

What can you buy?

You must buy a 'residential premises' with any amount withdrawn using the FHSSS. This includes vacant land if you're planning to build. The premises has to become your home (not an investment property) and you need to occupy it for at least 6 months after you buy or build it.

What happens if you don't buy?

If you don't buy within the required timeframe, you can contribute the released amount back into super or keep the money and pay tax equal to 20% of the assessable amount. Could you benefit from the FHSSS?

We can help determine whether saving for a home deposit using the FHSSS is a suitable option for you and assess other options.

Get professional advice

A skilled financial adviser can help you make the most of your money and achieve your lifestyle goals.

If you would like expert advice, contact

 Cathy Greven on 08  8364 5555.

Greven & Co

3a, 15 Fullarton Rd, Kent Town SA 5067

Phone +61 8 8364 5555

E greven@greven-co.com.au

W www.greven-co.com.au

 

This document has been published by Cathrine Greven and Pecaz Pty Ltd ABN 94 060 805 683 Trading as Greven Financial Services is an Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749 Australian Financial Services Licensee Registered Office at 105-153 Miller Street, North Sydney NSW 2060

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this document as the basis for making any financial investment, insurance or other decision. Please seek personal advice prior to acting on this information.

While it is believed the information in this publication is accurate and reliable, the accuracy of that information is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee nor any member of the NAB Group, nor their employees or directors give any warranty of accuracy, accept any responsibility for errors or omissions in this document.

Any general tax information provided in this publication is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.

The products and services offered by Greven Accounting Services are not authorised by GWM Adviser Services Limited and GWM Adviser Services Limited is not responsible for the advice and services provided by Greven Accounting Services

Vehicle Logs

Do you need to re-do your vehicle log book?

If not, we need your Odometer reading as at 31st March 2018, so please email greven@greven-co.com.au with your name and your odometer reading so we can update your data and vehicle log.

What are the rules for a Vehicle Log Book?

You must prepare a full 12 weeks worth of journeys (which includes both private and business trips). 

Once done, your log is valid for 5 years and you can change your car in that time without having to do another log book.

However, you must keep your odometer readings each 31st March (which we collect and retain as part our service to you). 


The only time you need to do a log book is

  1. If your 5 years has expired
  2. If your travel for business changes significantly.

What are your options for recording a vehicle log?

  1. The old fashioned way.  Purchase a Logbook at your newsagent or office supplies outlet.  You need to record every journey for either business or pleasure, including the date, purpose, odometer readings (beginning & end of each journey) and the details of the car you used.
  2. There are plenty of APPS online to download and use.  Cliock on the link-this website has reviewed the best tools for this purpose.
    https://www.penguinaccounts.com.au/best-logbook-apps/

In the above site, there is an APP named LogbookMe, at a cost of $248+GST per vehicle (for 12 weeks-that's how long you need) or you can get a 52 week subscription for $480+GST.  It is an amazing tool.

If you have any queries, please contact us on 08-8364 5555.  Alternatively, please email greven@greven-co.com.au with your name and your odometer reading as at 31st March, so we can update your data and vehicle log.

Legislation has passed that will enable people aged 65 or over to make additional super contributions of up to $300,000 per person from the proceeds of the sale of their home from 1 July 2018.

These are known as 'downsizer contributions' and they can be made on top of the existing contribution caps, without having to meet certain contribution rules and restrictions.

 

The opportunity

The downsizer contribution rules remove some of the barriers that prevent or restrict the ability to make super contributions at age 65 or over.

Provided certain other conditions are met (see below) eligible people will be able to contribute up to $300,000 per person (or $600,000 per couple) from the proceeds of selling their home on or after 1 July 2018.

The contributions won't count towards the concessional (pre-tax) or non-concessional (after-tax) contribution caps and there is no maximum age limit. Also, the 'work test' (for people aged 65 to 74) and the 'total super balance' test won't apply. 

 

 

Key requirements

There are a number of conditions that will need to be met to be eligible to make downsizer contributions, including:

·         The individual must be aged 65 or over at the time the contribution is made.

·         The property must have been owned by the individual or their spouse (but not necessarily both) for at least 10 years prior to the disposal.

·         The contract for sale must be entered into on or after 1 July 2018.

·         The property must qualify for the main residence capital gains tax exemption in whole or part, so properties held purely for investment purposes won't qualify.

·         The contribution must be made within 90 days of the change of ownership.

·         An election needs to be made to treat the contribution as a downsizer contribution.

·         No tax deduction can be claimed for the contribution.

Other conditions may also apply. For more information, please visit the ATO website at

www.ato.gov.au

Key considerations

There are some key issues that should be considered when assessing whether making downsizer contributions could be a suitable strategy, including:

·         The property being sold to fund the contributions doesn't have to be the current home. It can be a former home which meets the requirements. Also, a new home doesn't need to be purchased.

·         Once contributed, downsizer contributions will count towards the 'total super balance' which could impact capacity to make future contributions.

·         Downsizer contributions can't be transferred into a tax-free 'retirement phase income stream' if the 'transfer balance cap' has been used up. The transfer balance cap is $1.6 million in 2017/18.

·         If the transfer balance cap has already been used up, the contribution must remain in the 'accumulation phase' of super, where investment earnings are taxed at a maximum rate of 15%.

·         Money held in the accumulation or retirement phase of super is assessed for both social security and aged care purposes.

Could you benefit from downsizer contributions?

If you are thinking about selling your home after 1 July 2018, we can help you decide whether making downsizer super contributions is a suitable strategy for you and assess other options.

Get professional advice

A skilled financial adviser can help you make the most of your money and achieve your lifestyle goals.

 

   

 

This document has been published by Cathrine Greven and Pecaz Pty Ltd ABN 94 060 805 683 Trading as Greven Financial Services is an Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749 Australian Financial Services Licensee Registered Office at 105-153 Miller Street, North Sydney NSW 2060

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this document as the basis for making any financial investment, insurance or other decision. Please seek personal advice prior to acting on this information.

While it is believed the information in this publication is accurate and reliable, the accuracy of that information is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee nor any member of the NAB Group, nor their employees or directors give any warranty of accuracy, accept any responsibility for errors or omissions in this document.

Any general tax information provided in this publication is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.

The products and services offered by Greven Accounting Services are not authorised by GWM Adviser Services Limited and GWM Adviser Services Limited is not responsible for the advice and services provided by Greven Accounting Services

ATO Disclosure of Business Debts

Treasury has released an exposure draft of the Treasury Laws Amendment (Tax Transparency) Bill 2018 which will authorise the Australian Tax Office to disclose business tax debts to credit reporting bureaus where the businesses have not effectively engaged with the ATO to manage their debt.

What if it's passed?

The Bill will amend the Taxation Administration Act to allow taxation officers to disclose the tax debt information of a business to credit reporting bureaus when certain conditions & safeguards are satisfied.

 

Who will it apply to?

Business taxpayers with an ABN and a tax debt where at least $10,000 is overdue by 90 days.

 

What must the ATO do before disclosing the debt?

The ATO must ensure the taxpayer is made aware that the Commissioner is considering disclosing their information and give the taxpayer an opportunity to engage with the ATO to prevent their debts from being reported. 

It is expected that tax debt amounts that are being disputed in various forms, and tax debt amounts that are being paid under a payment arrangement will not be disclosed.

 

What must the ATO do before disclosing the debt?

The ATO must ensure the taxpayer is made aware that the Commissioner is considering disclosing their information and give the taxpayer an opportunity to engage with the ATO to prevent their debts from being reported.

 It is expected that tax debt amounts that are being disputed in various forms, and tax debt amounts that are being paid under a payment arrangement will not be disclosed.

When would a disclosure be permitted?

If all the following procedural conditions are met:

  • The Commissioner has notified the taxpayer at least 21 days before disclosure

The Commissioner has consulted with the Inspector General of taxation

 

Get professional advice

 

We can assist you with your taxation affairs and in dealing with the Taxation Department.

 

 

Where can I get further information?

https://www.ato.gov.au/General/New-legislation/In-detail/Other-topics/Improve-the-transparency-of-tax-debts/

 

 

 Greven & Co 3a, 15 Fullarton Rd, Kent Town SA 5067 Phone +61 8 8364 5555 E greven@greven-co.com.au W www.greven-co.com.au

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this document as the basis for making any taxation or other decision. Please seek personal advice prior to acting on this information.

While it is believed the information in this publication is accurate and reliable, the accuracy of that information is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Greven & Co does not give any warranty of accuracy, accept any responsibility for errors or omissions in this document.

Any general tax information provided in this publication is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.

I thought I would drop you a quick line, as it has been another torrid time on the global equity markets this last week.  I wanted to reach out to you and explain a little more as to what is going on and why.


I don't have all the answers, but research economists I rely upon tell me that sometimes it is not necessarily one key driver but a combination of potential factors that leads to uncertainty and as a result increased volatility in markets. Historically strong market rallies have been punctuated by sell-offs such as we have seen over the past week.

The key observations are

  • This drop is part of a correction of a long run bull market (bull market means increased rates of return and share price increases).  I am told that this is to be expected (a correction) as share prices/equity valuations  have been climbing up (we are very close to where the markets fell from at the start of the GFC).  Having said that, it is not a time for panic but rather watch markets closely.
  • Prior to the start of February 2018 volatility had been declining, on the back of a host of factors such as sustained monetary policy easing globally, strong corporate earnings, continued discal stimulus and synchronised global economic Growth.  So what went wrong I hear you ask?  It all changed drastically with the start of a spike recorded on the 5th of February measured by the CBOE Volatility Index (known as the VIX), which measures the market's expectation of volatility implied by S&P 500 index options. 
     - What does that all mean? 
     - Basically a domino effect.
    On the 2nd of Feb, the majority of European indices (index markets like our ASX) fell more than 1% so when the markets opened on the 5th of February in the US, the US Markets did the same- had a panic attack and started another huge sell off of equity stocks and naturally Australia followed suit.  Australia hasn't yet recovered as you can see from the market chart below.  Over the last 12 months we started around the 5,761 and today it is 5,802 after falling from 6,121 on the 2nd of February.  A huge drop and one that cannot be ignore but as you can see from the chart, one that will continue to go up and down. 

  • Overseas markets have also appeared to have identified the recent stronger jobs figures as a potentially important catalyst for future inflation and as a result, this has had an impact on the US Bond Yield (what does that mean – that see basically the price of interest could go up).
  • There are a number of products in the market for people to invest in (or gamble on) and one such product is called an Inverse Volatility (ETN) or leveraged exchange traded notes, which bets on the VIX (as detailed above the volatility index that measures volatility) falling or staying low had attracted significant investments from some say one source, that had made a fortune on their investment by purchasing this product on the premise that the markets would fall, which they did, big time.  This or these investor/s cleaned up!  Now there is no such product/investment in Australia but this kind of product has an impact on the global markets and subsequently an impact on all markets.

We continue to expect further volatility in markets as some of the observations discussed, and potentially more insights are better understood over the coming weeks but at this time we have been recommended to HOLD and watch at the very least, but that depends on your current situation and circumstances and I recommend you contact Greven & Co if you have any concerns to discuss.

In times of heightened volatility such as this, maintaining your long-term in

vestment strategy aligned to your personal investment objectives is what matters most.  If you are an existing Greven & Co client, you know what that is, if you are not, then we recommend you make a complimentary appointment to discuss your needed and objections (including your investment objectives).

Here is a video I found to be refreshing in a time like this, which looks at the markets as a whole and identifies areas that are not taking into consideration and should be when determine your investment objectives.
 

If the media talk about another GFC, you can see the VIX of this last week doesn't match the GFC volatility spike.  Remember the media is there to sell news and they speculate and sensationalise rather than report the facts as they are.  I'm here to give you the facts and comparison between past events to assist you in understanding what is happening.

Four issues for investors to keep on the radar in 2018-Financial Planning

2017 was a year of surprises and shocks. This year is likely to bring its own remarkable events in economics and politics. So rather than trying to predict precisely the twists and turns of the future, here are four broad issues that investors should keep on the radar in 2018.

Read this informative article by Bob Cunneen, Senior Economist & Portfolio Specialist, NAB Asset Management

Rental Properties-what you need to know!

Rental Properties-what you need to know!

If you invest in a rental property or rent out your current property, you'll need to keep records right from the start, work out what expenses you can claim as deductions, and declare all your rental-related income in your tax return.

Understand what your obligations are with this information from the ATO.

IPA Pushes for tax Reform in 2018/19

The Institute of Public Accountants has issued a call to the government to prioritise tax reform in its submission for the 2018-19 federal budget.

Its a New Year & the perfect time to get your finances into shape.  This range of tools from Money Smart can help you do just that.  There's no time to start like the present. 

The Tech to Help Keep Your New Year's Resolutions

You don't order food, look for a job or even check out local real estate without using technology, so why embark on a life-changing New Year's resolution without a little digital backup to help you along the way? According to U.S. News and World Report, 80 percent of resolutions made each new year are not kept. In fact, most people abandon their self-improvement plans by February 2018.

That may sound bad for resolution-makers; it doesn't have to be – not if you use technology to sidestep the common reasons people bail on their carefully laid plans. Here are some of the most common New Year's resolutions for business owners as well as recommendations for innovative tech that makes changing your life easier.

Pinterest reveals its top 100 trends for 2018-from "Super" coffee to the new glamping!

With every new year comes new trends-some good and some bad.  Take 2017 for example-we had the rise of solo travel but then we also had the resurgence of 'jorts' (that's denim shorts). 

Thankfully, 2018 is set to look overwhelmingly positive.

Pinterest has released it's top 100 trend predictions for next year and while there are some we're not sure we'll get on board with (read: fashionable fences), there are plenty we will.

From a new way to get your caffeine fix to re-imagining the desert-these are the one's we're most excited about.

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