| |
| |
|
 |
How Is It Affordable |
|
|
|
The following is an example using income within Australia and tax being paid at the minimum rate of 31.5 % (adjusted to 34.2% to account for rental income and tax liabilities) if you are an overseas investor this will of course vary depending on your status. Professional advice will be required in order to substantiate your entitlements and overall costs per annum.
Example of a recent purchase at Central Lakes, Caboolture Queensland. Four bedrooms, double garage, ducted aircon., rendered, DeLonghi kitchen appliances - turn key with all landscaping.
| Price - house/land package |
$368000 |
| Deposit |
$74000 (cash deposit) |
| Includes Stamps and Legals |
$12 K |
| Owner taxable income |
$80000 p.a. |
| interest only loan through ANZ - land/building $306000 @ a rate of 8% fixed variable |
$306,000 |
| Repay interest only under LOC |
|
Note: This is an estimate only of interest payable and will be determined by the credit worthiness of the borrower and the type of mortgage selected.
Outgoings year 1
Rental income estimate $ 18500 based on a 50 week year - added to current income of $ 80000 p.a.
Property management
|
1700 |
| Borrowing expenses |
200 non cash |
| Council rates |
1600 |
| Depreciation |
4500 non cash |
| Insurances (building & landlord) |
750 |
| Special building write off |
4500 non cash |
Interest
|
24400 |
| Sub total expenses |
37650 |
Tax loss
|
-19150 |
| Assumed tax rate (34.2% |
Tax saved from above = $ 6549 |
Net cash position
| Cash shortfall = Rental income $18500 less outgoings $37650 = |
$19150 |
| Tax rebate |
$6549 |
| Add back non cash items |
$9200
|
| Net cash outlay after tax rebate |
$3401 p.a. |
| |
$65.40 per week |
Through years three to ten;
Income, say, $ 21000 added to current income
( reviewed at least annually 4.5% inc ) |
|
| Interest @ |
8 % $24400 |
Other outgoings say, $ 6650
(insurances, rates, rate inc, fees, m&r $2K) |
|
| Shortfall say, |
$10050 |
| Depreciation allowance, say, |
$6000 |
| Total claim against tax , say |
$16050 |
| Tax rate |
34.2% |
| Rebate |
$5489 |
| Net cash outlay after tax rebate = Shortfall minus tax rebate |
|
| Per annum |
$4561 |
| Per Week |
$87.73 |
Note: The cash benefit from the tax allowances is gained through an application to the ATO which provides for amount of the tax benefit to be deducted from current PAYE tax payroll deductions.
It is also possible to capitalise the first few years interest payments, will will result in a positive cash situation as required.
Overseas Investor : From the example above and charts below, an Overseas Investor can get an approximate appreciation of the costs to ownership minus, tax credit and dependant on the amount of deposit - will have a substantial impact on weekly repayments.
|
|
|
|
|
| | |
| | |
|
