Hot off the press this week was the news that some first home buyers in NSW will be able to choose between paying the lump sum of stamp duty or an annual land tax. While first homeowners will be the only immediate beneficiaries, the government was not shy about voicing its ambition to extend it.
Under the plan first, home buyers purchasing a property up to $1,500,000 can opt to pay an annual fee of $400 plus 0.3 percent of the land value. For example, buying a $1.35m house, with a land value of $810,000, the stamp duty would be $59,125. But if a buyer is holding on to the property for less than 20 years, they are better off paying the $2,830-per-year land tax — which would total $56,600. For apartments, the deal is better because the land value is less. An $830,000 apartment, with a $265,000 land value, would require an up-front payment of $32,440 stamp duty, or the buyer could pay $1,195-per-year land tax.
There are a number of factors to consider – are you buying an investment property or your family home? What’s your economic situation? Either way, it will be interesting to see how/if this tempers the ever-running hot property market (particularly in Australia’s major metro centers) and what this could mean for people trying to get into property.
In the news: Smart investing can see you make $50,000 a year in passive income
There’s a time bomb waiting for some Aussies as a $2 trillion wealth gap means they can’t afford to stop working – but there’s a clever way to overcome this. Find out how in my latest article for news.com.au.
We are one week out from EOFY, so it’s time to start preparing for the financial year ahead. We’ll be kicking off with a tax smart session for the start of the FY followed quickly by a talk on crypto. Click the links to register and join below:
Event schedule and links to book here:
- Invest tax smart in the new financial year – 6 July 12.30pm – 1.30pm
- Cryptocurrency investing 101 – July 7, 12.30pm – 1.30pm
- How to save more money faster – July 28, 12.30pm – 1.30pm
- Cryptocurrency Investing 101 – August 02, 11am – 12pm
- Invest smarter when the market is crashing – 17 August 12.30pm – 1.30pm
- Buy property the smart way in 2022 – August 18, 12.30pm – 1.30pm
- How to Be Smarter With Money Through Your Career – September 1, 11am – 12pm
- Money and investing hacks – 14 September 12.30pm – 1.30pm
- How to Adult: Financing 101 – October 11, 12pm – 1pm
- How to FIRE without sacrificing your lifestyle – 12 October 12.30pm – 1.30pm
Share market wrap
The Australian share market edged slightly higher on Thursday, as gains in financial and tech stocks offset heavy losses across energy and mining companies. US markets were weighed down by comments about inflation from Federal Reserve chairman Jerome Powell, who appeared before the Senate Banking Committee on Wednesday.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week -1.3% lower than last Friday, at 6,691.40 points.
- The US ‘S&P 500’ (Top 500 shares in America) finished the week -0.14% lower than last week, at 3,759I .89 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week 0.75 % higher than last week, at 11,053.08 points.
- The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week -0.23% lower than last week (Friday AEDT) at 7,026.24 points.
- The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 2,015.93 for the month, down -33.78% for the month to date
Investment story of the week: Pointerra Ltd (ASX: 3DP)
The Pointerra share price has risen sharply with a 36% increase at time of writing for the past 5 days. The 3D geospatial data technology company has announced two new US-based contracts that will assist storm emergency response crews. However, despite the recent increase the share price still remains at a 39% loss for the year to date. The company estimates that these new contracts will provide USD$250,000 worth of revenue annually and this could be higher dependent on usage of the Pointerra3D Answers storm response solution. Keep an eye on this stock as it looks like they may have a bright future.
Smart Money upside #75
Because people don’t often talk about the full ins and outs of their money, it’s hard to learn lessons from hearing what good and bad choices other people make. This story is from one of our clients to help you take your money game to the next level.
Individual; early 30’s with income of approximately $80K. Total assets worth $180k. Saving about $2K annually
- Feel like paying too much tax and not having enough to retire
- Poor money mindset and limiting beliefs
What they wanted from us / the advice process
- Setting up a saving plan to fund my ideal lifestyle
- Set up a clear investment plan, diversify and increase investments
- Set up multiple income streams
What success looks like for them
- Feel financially secure
- Ability to cut back on work
- Have more disposable income
What money strategy they were following before we went through the planning process
Saving inside offset account and investing into high dividend-paying stocks and CFS portfolio
What money strategy they choose to pursue from our planning work
Putting excess cash into super and shares and pivot banking framework
Key benefits of going through the process
- Increased investment diversification
- Switch to a low cost super with access to a range of quality passive investment options
- Clear super contribution strategy that is inline with her circumstances
Value of advice after all advice fees year one: – $6k
Year 20 upside after advice fees: $400k
If this story resonates and you want to chat about how to get these sorts of results, you can book an intro call here.
Giving update of the week
At Pivot we’re passionate about the benefits of having a solid education in all important areas of life (money included), so we’ve celebrated by providing 100 children with access to life-changing e-learning education and training. This is all part of our ongoing commitment to make a difference in the lives of our clients and simultaneously make an impact on our world through our partnership with B1G1 (Buy 1 Give 1). You can check out more information about our giving here.
Money hack of the week: How to become your own master of efficiency.
If your high school self saw what you do today, do you think they’d be surprised? I chatted to Lynne Cazaly, founder of Cazaly Communications, on her journey since starting her business 20 years ago, and if she ever expected to write NINE books!
Check out the chat here.
Money mistake of the week: Why there’s no magic wand for your problems.
I don’t mean to be the bearer of bad news, but there’s no magic solution to your problems. FACT: Everyone is unique, and therefore your pathway needs to be customised, whether it’s your career, health, finances or relationships. In this chat, psychotherapist Andrew Sloan shared his most surprising realisations from interacting with hundreds of clients every year. Check out our full chat here.
Jargon Buster of the Week: Interest only loan (via Mozo)
Interest only loans are usually offered for a set term, such as five years. After the interest only term ends, borrowers can pay the original loan amount in full or convert to a principle and interest loan to start paying down the loan. Interest only loans are often used to buy investment properties. The lower monthly repayments free up cash for other uses, and if the property has appreciated in value it can be sold at the end of the loan to repay the original loan amount.
Podcast from last week: #175 w. Aaron Christie-David – Mortgage & property update
In this episode, I chat with Aaron Christine David from Atelier Wealth. He is a Mortgage Broker superstar who’s business helps people get into the property market and get on the front foot with their mortgages.
We talk about some of the trends that he’s seeing in the mortgage space, the overall property market, what people should know about the changes to mortgage assessment rates where he thinks the property market is going from here. And some of the mistakes that he sees people are making and how to set up your property purchase.
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