Do I have to pay Capital Gains Tax?
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Q. Our son has just purchased a unit as owner/occupier but cannot move in until current lease period has expired, which is 14/01/09. Does this preclude him from the capital gains exemption as an owner when he does finally sell, after one year of ownership of course.
Josie’s answer: Capital Gains Tax is a confusing area of tax law and it is really a question that needs to be directed to an accountant. Anyway, I will give you my understanding of the way it may apply to your son’s situation. He may be subject to some capital gains tax, however it will be pro-rated when he sells. For example, if he Read more
Retirement planning help and investing $50K
June 11, 2008 by Josie Kay · 4 Comments
Q. My Husband and I need help with “financial planning for retirement“. We are both over 50 and We’ve sold our home & have $50,000 leftover. We have a $250,00 new mortgage with $30,000 in offset accountant.
We’re currently spending offset money on improving our house to use for selling when retire. We have no superannuation (self employed).
We have no great aspirations when retire, family around just want to live & pay bills no liabilities except mortgage & business vehicle.
How can we use $50,000 wisely now. My Husband is able to do all renovations to home himself…..current value of home approx $500,000. thanks
Josie’s Answer: Assuming I am interpreting your question right, your main question is that you have $50,000 sitting in a savings account. On top of this, you have $30,000 in an offset account which effectively means you are paying interest on $220,000, rather than $250,000.
My initial thoughts include:
- Why haven’t you topped up the offset account by $50,000? If you do this, your bank will be charging interest on $180,000 ($250K - $30K - $50K). I particularly like this strategy because the interest on the home that you are living in is not tax deductible. Also, you are paying in ‘after tax dollars’, i.e. your net pay.
- If you invest the $50K you need to think about your time frame and what you have to do with the funds e.g. term deposit, managed funds. Investment markets are Read more
I am separated and never received First Home Owner’s Grant. Do I qualify?
June 1, 2008 by Josie Kay · Leave a Comment
Q. I’m 56 years old, separated and I want to buy a unit. My husband brought a house before we met. When we brought a house together we were not entitled to the first home buyers grant because he used it when he brought his first house. My question is: am I entitled to the grant, because I have never technically had one.
Josie’s answer: I can understand why you are keen to explore the possibility of obtaining the first home owners grant which is currently $7,000. It would certainly help to buy the unit you are interested in purchasing.The First Home Owner’s grant is a Federal government initiative and administered by each State and Territory. From my understanding of the rules, if your ex-husband owned a home before you were married, technically you did not hold a relevant interest, i.e. your Read more
I have $100K after selling my house. Should I buy another house or invest the money?
Q. I am 40 years old with 1 child in college 16 yrs old. I have $100,000 after selling my house. I work 4 days per week and earn 616.00 gross should I buy back into the market or am I better of to invest my money and rent.
Josie’s answer: Good question and would love to have a crystal ball. There is so much talk that the property will stagnate in the next year or two, and of course it depends on where you plan to buy (some areas seem to be doing OK).
From a purely numbers perspective, there is plenty of research to suggest people are better off renting than buying, but only if they invest the difference.
Most of us don’t have the discipline to do this.
From my perspective, I prefer to be a home owner as it gives me a sense of security. I hate the idea of a landlord telling me what I can or can’t do, Read more
We’re Having Trouble Saving for a home - Any Suggestions?
March 7, 2008 by Josie Kay · Leave a Comment
Q. My wife & I are finding it very difficult to save for a deposit on a new home. Any suggestions?Josie’s Answer - This is a very daunting task considering that most new borrowers need to save approximately 10% of the home value in order to get into their first home.
You should you think about opening a high interest savings account (see Rate City) and have a portion for your salary (at least 10-20%) automatically transferred into this account each month. Read more
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