- Originally posted by summersky:
You guys have all positive geared properties? My 2 are negative. How do you get a positive geared P and get future good capital growth ?
SummerskyI think you’ll find that almost everyone has or had neg geared properties.
That’s not so bad if:
a) you can support the cashflow drain,
b) the properties will experience good cap growth in the future.
c) add value somehow so you can increase rents.
Try to offset the negs by buying pos cashflow ones from now on, and /or aggressive debt reduction on the existing ones to decrease the loan interest below the rent income.Cheers,
Marc.
[email protected]Hi guys,
Interesting topic. Just out of interest, is it possible to salary sacrifice my HECS debt? That would be very handy. Also, how come some companies allow you to salary sacrifice everything (inc. home loans) but other companies do not. This seems highly unfair, for example the private company that I work for only allows salary sacrificing of your superannuation…
Also, I disagree elkam. 40k a year at retirement is quite sufficient depending on your situation. For example, if you have no house debts or any other debts than 40k a year equates to ~$700 p.w. which is more than enough to live off and be able to take holidays every few months. At moment, while my average weekly spending is $180p.w. which includes everything – food, rent, petrol, tennis and soccer once a week. However, doesn’t factor in registration for sport and car, services etc. However, if you are supporting two people than this would be a bit more.
Anyways, just thought i’d put my 2c in.
Cheers
Paul[suave2]Hi Paul,
Unfortunately you can’t salary sacrifice your HECS debt without incurring FBT at 46.5%.
Non-profit organisations and charities have exemptions from FBT up to about either $7500 or $15,000 for charities, so they can salary package anything up to these limits without paying FBT.
Everyone else is subject to FBT at the full rate, except for things that are tax deductible to you or are concessionally taxed under FBT, like cars and laptops.
Even though the FBT laws don’t limit what can be salary sacrificed, most companies/employers either don’t offer salary packaging or only in limited cases, like super, due to the extra admin required. This actually doesn’t make sense as many accounting firms offer full salary packaging services which take over the complete admin of the salary packaging, with no cost to the employer, and a small cost to the employee, which is tax deductible.
This is also a major incentive to be able to be employed through your own company/trust so that you can access these FBT loopholes, even if you are subject to the Personal Services rules.
FBT is actually one of the major areas of tax law that can be utilised by employees to gain a substantial tax advantage on items that are not normally deductible, but the ATO has been very successful in portraying FBT as too complicated and scaring off employers.
Hi Summer, Like you you I had a very small super balanec in a Retail Superfund. Decieded that I needed it to wortk harder so a did some research. I ended up transferring ti an Industry super fund with low fees and good returns Choze my own mix and I can change it any time I like without fees. You mentioned Industry super funds you might be aware that they have financial planners who are not paid by commision. I think its a flat $750 fee.
I am looking to get the most out of my super so will probably take advantage of the govt co contribution scheme which will for taxable income under 28k on a max contribution of $1000, the govt will kick in $1500. this is indexed down to dollar for dollar at about $38K taxable income and cuts out at 58k Taxable income. You can contribute in this way once per year and you declare it on your tax return. Not bad for young people. Get a return of 150% which then compounds with the rest of your super. Any way check out the ATO or your superfund web site and search under co superannuation co-contributions.thanks all.. and to cazmeister re small amounts in super. I did claim the co-contribution last yr… I didnt have to put in a huge amount either… think that the optimum for me was $450 of my own money. I used the ATO tax calculator to figure out the best amount.
Another question for y’all. Anyone know how bank guarantees work… if buying OTP? And has anyone had bad/positive experiences with them? What are pitfalls?
Here I am again.. and over a month down the track from my 1 st question that kicked off this thread. Just an update. I decided to jump in and buy another IP after all… but this ones off the plan, & nice. So it means in 2 yrs I will have to come up with some serious cashflow by then. (Borrowing total amt + costs. ). In meantime all I have to pay is annual bank guarantee costs.
In the meantime, I am continuing to Salary Sacrifice. So I am really taking a bet each way. My plan is also to try to reduce some of my other debt before then.
Just re-calculated my IP number 1’s cashflow… I am now $150 per mth positive! Whoo Hoo! [thumbsupanim](Not sure I’ll be in party mode when I start having to pay costs for IP number 3 though)[worried]
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