Newsletter May 2025
Here is the latest news in the home loan world
These are the latest things to be aware of:
1. Avoiding Lenders Mortgage Insurance (LMI) – more choices than ever:
· ANZ will waive LMI, based on the postcode
· Occupations – a larger list of LMI waivers
· Lenders offering no LMI
· Plus – stay tuned for changes
o Albanese promised to extend the existing Home Guarantee Schemes to allow all first-home buyers to purchase with a 5% deposit,
o with no income/salary caps, therefore eliminating the need for LMI for the vast majority of home buyers
2. ATO clearance Certificates for all property sales
· If you are selling a home/property , you will now need a mandatory ATO clearance certificate. :
· The $750,000 threshold has been reduced to $0, requiring clearance certificates for all sales.
· Withholding Rate rises from 12.5% to 15%: This is the amount that will be withheld if you don’t have a certificate.
· Ensure the name registered with the ATO matches the name on the title.
· Google: ATO Australian residents and clearance certificates
3. RBA meeting dates:
The RBA will hold only eight board meetings in 2025, no longer on the first Tuesday of the month. Dates will be set for
February, March,
May 19-20,
July 7-8, August 11-12, September 29-30,
November 3-4, December 8-9
4. Have you considered using a family trust to buy your next property?
Benefits of using a family trust to buy property
There are three main reasons why you might use a family trust to buy property or transfer property you already own to a trust:
Tax-effective profit sharing
A significant advantage of family trusts is their ability to distribute income to beneficiaries tax-effectively.
Family trusts are normally discretionary, which means the trustee can choose how income from the trust is distributed to the beneficiaries.
Trustees can strategically allocate income to beneficiaries in lower tax brackets, potentially reducing the family's overall tax burden.
Asset protection
Family trusts can protect assets from creditors in the event of bankruptcy.
While a trust isn't treated as its own entity in a legal sense, it's the beneficiaries, rather than the trustee, that hold the 'beneficial ownership' of the asset. Therefore, if the trustee is declared bankrupt, creditors cannot claim assets held in a trust, since they're not considered part of the trustee's personal estate.
If a beneficiary is declared bankrupt, it's a bit more complicated. If the trust grants the beneficiary a fixed entitlement to a trust asset (or a percentage of), creditors may be able to claim it to satisfy the outstanding debts. However, in a discretionary trust the trustee can simply choose to not distribute trust assets to that beneficiary.
Estate Planning
A trust provides a unique structure for passing the family estate down from one generation to another without incurring any stamp duty or other similar expenses.
The trust deed that governs a trust clearly lays down what will happen to each beneficiary's share on their death.
This should mean no messy Succession struggles to claim family wealth after someone passes.
Please let us know if you have any questions or queries.
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