If you secure it, the ATO allows you to extend the repayment period from seven years to 25 years. What the ATO is trying to achieve is that if you borrow money from a company, as long as it’s on commercial terms, they’ll permit it. So if you’re securing it over 25 years, that’s like a mortgage on a home loan, right? Secured and protected for 25 to 30 years. We can stretch it out. If it’s unsecured for seven years, you have to pay it off much more quickly.
Now, why is this a longer-term solution? For assets like properties, you might hold onto them for a long time, especially if it’s your personal home, and you don’t want to be forced to pay off part of your home loan within seven years. You want to align that with all the other loans, typically over 30 years.
So, what you do is align that loan, secure it, and then it becomes a solution. It doesn’t eliminate it, but it reduces the minimum repayment each year significantly. Now, whenever you receive income from salary or dividends from your business, you can use that to pay your home loan, let’s say to CBA. That’s the monthly payment to CBA. Another payment goes to your own bucket company, but over 25 years, in smaller increments.
If you’re keen to explore changing accountants, we have a non-obligation process to do that. The first step is booking a strategy call with one of our accounting team. It’s a free 20-minute zoom or phone call where you get to meet us to manage your questions.
From that point, you can consider doing a “Look Under The Hood” with us. There is no obligation to change accountants, but we give you a second opinion if you’re paying too much tax.
Throughout that process, we can identify any problems we see with your current setup. Anything that your current accountant hasn’t claimed, or tax you may have overpaid, and strategies of how we might fix that going forward. We can run through with you once you book with us.
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