Planning for the future
The end of the financial year is usually the trigger for many property Investors to start preparing their tax returns with the view to collecting a refund from the ATO for accrued negative geared losses through the year. Of course those Investors who have wisely held their investments for considerable years whilst chipping away at the debt may very well find themselves in a positively geared position. And whilst this could result in a tax bill rather than a refund it is a great position to be in and allows those Investors the option to consider investing again.
There is nothing wrong with “affordable” and “manageable” negative gearing but we don’t want Clients purposely negatively gearing just to save tax… that is pointless. You must be planning for future capital growth whilst working towards moving the position from negative gearing to neutral and then hopefully on to positively geared. This can be done as rents increase and debt is reduced.
Whilst we are mostly conscientious of preparing our tax returns in conjunction with our Accountants, recent conversations with many Clients highlighted to me that we are less diligent in ensuring our insurances and wills are updated with the same consistency.
I was fortunate enough to recently head over to Indonesia to spend 8 days cruising on a friend’s new boat and that was a suitable trigger for me to ensure both my insurances and wills were up to date.
At Celsius we are not qualified to give advice on insurances and wills however we do highly recommend that every one of our Clients regularly reviews these items to ensure they are up to date and current.
Some of the insurances our Clients may like to consider and talk to a Professional about include:
- Life Insurance – my life insurance will pay out all my debts and leave my family with the assets.
- Private Health Insurance – can also assist with reducing your tax rate.
- Trauma and Critical Illness Insurance
- Landlord Protection Insurance – I have this on every one of our investment properties and whilst I have never called upon it, it is affordable peace of mind.
- Building and Contents Insurance – be mindful that strata titles properties mostly will have the building insured through the strata company and in this case you may only require a contents policy.
- Vehicle Insurance
After Insurance comes wills, is your will current and up to date. Does your Will include your current family situation, for instance has it been updated since children have arrived. A current Will can save your family members a lot of trouble in the event of an unexpected tragic loss.
As mentioned above Celsius is not qualified to provide professional advice on these matters however we felt that it was important to remind our valued Clients to seek professional advice and ensure you have your personal finances, insurances and wills in order at all times. If you would like some assistance with introductions to those professionals who we personally use I would be more than happy to pass these details on for your consideration.
Finally it was a great privilege to host Luke and Steph from Ocean Heroes at our annual City to Surf charity BBQ last Sunday. We were humbled by the generosity of our staff, friends and Clients who came together to donate $2,000 toward this very worthwhile cause.
Spring is just around the corner and I’m excited to see what this brings to the Perth property market.
All the very best
Richard