November Namaste from your trusted local accountants in Ballarat and Torquay, CGH Accounting Services. This is a beautiful time of year in both Ballarat and Torquay. The climate has come good, holidays are just around the corner and we’re starting to look towards Christmas. Our last few months have been, as is traditional, our busiest each year, and our accountants have sorted out most clients’ tax returns by now. Our aim is to leave you with a nice cache for Christmas shopping and summer holiday spending.
In Ballarat in November, we have the Ballarat Cup on Saturday 19 and our famous annual SpringFest Sunday Market at Lake Wendouree is held on Sunday 27. A great day out with the family. Down Surf Coast way the Aireys Inlet Fair is on during the early part of the month, and later in November the amazing Queenscliff Music Festival kicks off.
For this newsletter, we have prepared some short articles relating to finance and accounting. These are easy to follow, with handy information for you. We discuss a few topics related to property, BAS and also share advice in connection with the recent floods. We hope these items will prove useful. We wish all clients and readers the very best and we’ll be back with more news and tips in December.
RENTALS: AN INVESTORS MARKET
Right now is a painful time if you are looking to rent a house or apartment. If you already own an investment property and don’t have a large mortgage, you are sitting pretty. But perhaps you don’t closely follow developments in the sector and don’t communicate with the property manager very often? If so, you may not be aware that rents are currently continuing to rise steeply. The number of places for rent has shrunk, in both capital cities and regional areas as well. Demand far exceeds supply, and this looks guaranteed to become even more acute as foreign students start coming back to Australia and migration picks up again. Post pandemic, many people in these categories are looking at regional towns such as Ballarat and Torquay, rather than just Sydney and Melbourne. So now could be the time to follow it up with your property manager, in case it’s time to raise the rent in accordance with market conditions. If you are looking to purchase an investment property, now is a good time, because prices have either stagnated or in many cases gone down. However, the flip side of that coin is that interest rates have gone up and money is dearer.
BORROWING MONEY: BECOMING TRICKIER
In general, it is getting harder at the moment to borrow money. Your dream may be an investment property and prices look quite appealing right now, but unfortunately loan conditions have become tighter. Securing a loan has become more difficult and it’s a good idea to seek help from professionals. Your accountants can offer advice. Ask us today! Also, mortgage brokers can be a smart way to go, rather than trying to do it all yourself in a somewhat hostile environment. The Reserve Bank is saying now that every rate increase of 0.50 percentage points will reduce the maximum amount of a loan (for most borrowers) by around 5%. This means that for average borrowers, their capacity has dropped by about 25%. That’s a lot, and it’s all happened quite quickly. However, it’s not all bad news. There are a lot of options when it comes to lending entities, and it can be very surprising how differently they operate. Sometimes two lending institutions will be up to $100K out, in their estimation of the maximum amount an individual can borrow. Professionals such as mortgage brokers know how to navigate their way to the best deal for you, and they know just how to best present your application in the right light. Furthermore, in most cases, they get their commission from the lender; you don’t have to pay them fees. CGH Accounting offers professional advice in this area and/or can introduce our clients to trusted mortgage brokers.
FIRST HOME BUYERS: HANGING IN THERE
It’s quite interesting to look at how property buying cohorts behave during this time of upheavals. Despite activity around home loans having fallen, first home buyers have actually proven to be the most active property buyers in recent months. This may be because they have already saved up quite a lot, or are being helped out by family, or both. It may be because they see this period of prices falling as their best opportunity in a long time to get their foot in the door, and it may be because many first home buyers are looking at the more modestly priced properties anyway. There are also government incentives to encourage and assist first home buyers. The leading market analyst says that this is definitely a trend during downturns and that demand for finance from first home buyers traditionally remains resilient during such times. It’s an interesting fact. Quite the positive note amongst all the doom and gloom, we think. Go you young first home buyers!
FLOOD ASSISTANCE
Many parts of Australia’s east coast have been devastated by floods this year. This has been a very difficult time physically, mentally and financially for thousands of families, businesses and communities in Victoria, NSW, Queensland and Tasmania in 2022. The ATO knows this has been an extremely trying tax time this year for many people. Accordingly, they have made a number of allowances and concessions which are designed to make things easier for those who have been impacted by the floods. If this relates to you, talk to our accountants to find out more about what measures have been put in place, and how they might help you.
BAS HINTS
At CGH Accounting Services, our Ballarat and Torquay based accountants take care of quarterly Business Activity Statements (BAS) for many clients. We recommend having accountants look after this aspect of your business. Nevertheless, some clients still do it themselves. Either way, it definitely doesn’t hurt for all business owners to keep informed and up to date when it comes to BAS, whether they do it themselves or have their accountants attend to it. How should BAS be done these days?
- On-line. Doing BAS by paper and by post is starting to look incredibly old fashioned. We wonder if they’ll phase it out completely within a few years! Doing BAS on-line is the way to go.
- On-time. The ATO is cracking down on late submissions and payments.
- On-track. Is everything correct with your BAS? All BAS mistakes can be fixed, but this can start to get tricky. This is when having a friendly accountant do it for you might be your best bet!
