Well, it’s been a big couple of weeks in finance with the Federal and State Budget’s being handed down, as well as a surprise interest rate cut by the Reserve Bank of Australia (RBA).
So what does this mean for borrowers, or those wanting to borrow?
RBA Interest Rate Cut
By now, you will likely have heard about the RBA interest rate cut which was announced on 3 May. Following on from the RBA announcement, many banks and other lenders have passed on the full 0.25% interest rate cut and most others, whilst short of the full 0.25% cut, have passed on a significant amount.
This interest rate cut is great news for borrowers, and even better news when all or most of the interest rate cut is passed on!
If you’re unsure about what interest rate cuts have been announced by your bank or lender, please make contact with your Finance Manager.
Some good news here for all borrowers earning over $80,000 pa, with a stretch of the 32.5c tax bracket up to $87,000.
And for businesses, a few goodies also, with:
- a cut in the company tax rate,
- an expanded definition of ‘small business’ (businesses with turnover up to $10 million, previously
$2 million), and
- an extension to small business being able to depreciate assets below $20,000 immediately.
WA State Budget
There were no real direct ramifications from a finance perspective, apart from some increased charges.
What does this mean to you?
Overall, each of the above changes has the potential to increase borrowing capacities for both mortgages and for business owners and their business loan related facilities.
Your Finance Manager will be able to advise further on this based on your individual circumstances.
End of Financial Year Approaching
As we head towards the end of the financial year, should you require any financial advice, please let us know and we can either help or point you in the right direction.
The recent Federal Budget had many changes that can affect finances. If unsure, it’s best to ask, so contact your Finance Manager or call us on (08) 9381 8311.
And from a Perth perspective - Your Property Development?
With many of the residential areas in Perth suburbs being rezoned to allow for higher density housing, your property may qualify for redevelopment.
Typically the areas that have, or are likely to be rezoned, are close to train stations or shopping centers. If you’re unsure about zonings in your area, your local Council will be able to advise you, including whether you can build two, three or four dwellings on your block.
This could be a way for you to get a new home, downsize, or have your own rental property and create an extra income.
If you’re in one of those areas that have been rezoned, or is likely to be rezoned, and would like to look at a redevelopment, then finance is the best place to start. That is, it’s best to find out what you can borrow before spending time and money on council applications and building plans.
We’ve helped out hundreds of families over the years with this sort of finance and have some great contacts to help you understand what could be achieved on your property.
Please let us know if you think your property can be developed and if you have an interest in seeing what can be achieved.