If you are an Australian citizen or permanent resident contracting in the and seeking home loan finance for an Australian purchase, MAP can assist. Contractors in the UK may be working via their limited company and even making use of offshore structures to minimise tax payable in the uk. These sorts of structures are not common in Australia as the operation of the PSI rules essentially makes these structures no more tax effective than just sole contracting in ones own name. As they are not common in Australia many lenders will not lend based on this income unless 2 years overseas financials and tax returns can be provided. If you are using one of these tax effective structures then your taxable income will not reflect your true income and most banks will not lend to you. There is 2-3 lenders however that will see through this structure and essentially follow the money. Providing they can see your employer paying your… Read More

 What is a favourable purchase? As ones parents or grandparents get closer to retirement, they may wish to sell their property to either downsize or move into an aged care facility/retirement living. Many children do not like the idea of mum and dad selling the family home so will look at purchasing the property to keep it in the family. In this case sometimes the parents will agree to sell for under market value to assist their kids financially and also with the view to keeping the home in the family. When a property is sold for under market value to a family member, this is called a favourable purchase. Essentially what is happening is the parents are gifting equity to the child. For example, if the purchase price was $400,000 and the valuation was $500,000, the parents are basically gifting the kids $100,000 in equity.   Can you get a home loan for a favourable purchase? Absolutely, although different… Read More

If you are living overseas you will be required to provide certified witnessed copies of ID and certain other supporting documents when making a home loan application to purchase an Australian property. Depending on the State of Australia you are purchasing in, you may also be required to have your signature on the mortgage document itself witnessed by an authorised person.  Who can certify/witness the documents? Lawyer, Notary public, Consular official, JP or CDEC, Police officer if in Australia What are the requirements for a document to be satisfactory certified? It is not just sufficient that the document is certified, we also need to be able to confirm that the person who has certified the document is who they say they are. To ensure this is the case; An Australian solicitor needs to provide full name and State of Australia they are registered in (MAP can then do a search of the records to confirm), JP/CDEC needs to provide their registration number… Read More

Offset Accounts v Redraw Facility or LOC There are many methods for Australian Expats living overseas and those on Temporary Resident or Spousal Visa’s to pay their home loan (mortgage) off earlier. Over the coming months I will explore a few of these but this month we are looking at using an offset facility v a redraw facility or line of credit (LOC). What is an offset account What is a redraw facility, What is a line of credit facilty (all in one account). What is an Offset Account? An offset account is generally a standard transaction account that you would normally use to have your pay deposited into and pay for your groceries, fuel etc by using the debit card attached to the account. This transaction account becomes an offset account when it is attached to a home loan and is said to “offset the interest in that home loan”. To understand this it is important to note that… Read More

  Negative Gearing   This week I thought I would discuss briefly negative gearing and how it applies to expats living overseas.   What is Negative Gearing? Negative gearing is basically when an asset such as an investment property is purchased and the income from that property (rent) is not enough to cover the holding costs (interest on loan, rates, maintenance) so that an annual deficit or negative is created. Essentially, at the end of year 1 the costs of the property outweigh the rental income received from the property.   If you lived in Australia earning AUD then you could potentially write this loss off against your salary reducing the income tax payable. Eg, if you had a salary of $80,000 and the loss from your rental properties was $10,000 then your taxable income would be $70,000 thus resulting in less income tax.   Negative Gearing as an Expat: If you are an expatriate earning overseas income and therefore… Read More