October Property Market Update
What is the First Home Super Saver Scheme?
You may have heard a lot about First Home Owner Grant and the First Home Buyer Stamp Duty Exemption/Concession but have you heard of the First Home Super Saver Scheme (FHSSS)?
Back in the Federal Budget 2017 -2018, the FHSSS was introduced by the Australian Government to reduce pressure on housing affordability. FHSSS allows you to save money for your first home within your superannuation fund, by taking advantage of the concessional tax treatment of super.
Accessing your super before retirement
There is widespread misunderstanding that you can only access your super benefits when you reach your preservation age (i.e. when you retire). However, FHSS is a special release opportunity, which allows early access to super, provided certain conditions are met.
You can use the scheme if you are living in or intend to live in your first home when it is practical to move in for at least six months within the first year after your purchase.
How it works
Under the scheme, you can make concessional (before-tax) and non-concessional (after-tax) contributions into your super fund specifically for a home deposit.
Before-tax contributions are taxed at only 15% (which could be less than your current tax rate), and after-tax contributions are made into your super from after-tax income.
Up to $15,000 annual release of your voluntary contribution is allowed, with the life cap totaled at $30,000. This means that a couple can enjoy a combined concession amount of $60,000.
Every strategy has its pros and cons
Like many strategies, the FHSSS has its upsides and downsides. Some of these pros and cons include:
| Pros | Cons |
| Drawing attracts favorable tax concession | Money can only be accessed for first home deposit |
| Assist in accumulating savings as a deposit | Slower process to access funds |
| Earnings on contribution only taxed at 15% | Difficult to understand super rules |
The First Home Super Saver Scheme may not be suited to everyone’s circumstances and needs. Before making any financial decisions it’s important to carefully consider all the pros and cons and the suitability of the strategy to your individual situation.
Looking to buy your first home or exploring your options? First Things First is The Hopkins Group’s dedicated site for first home buyers, providing all the education, advice and support you need to make your first home buying dreams a reality. To learn more or to arrange a free catch up with a member of our team, click here.
Testimonial – David Keily
September Property Market Update with Brad Carlin-Smith
A landlord’s and tenant’s guide to vacating
Vacating a property can be a daunting experience for both tenants and landlords, if you don’t know what to expect. Tenants can get stressed about not receiving their full bond after they leave a property and the landlords stressed that their property won’t look brand new. But vacating doesn’t need to be a stressful experience, as long as you remember these key points:
For Tenants
- Always refer back to your condition report
You will have received a condition report when you first moved into the property, noting the state the property you have lived in during your tenancy was when you picked up the keys. Referring to this report will help you return the property back to how you received it. If you do not have access to your original condition report, don’t be afraid to ask your agent to send this to you prior vacating.
- You will need to do a full clean – but whether this is done professionally is up to you
It is preferred that you reach out to a cleaning agency to do a full clean of your property. however this is not necessarily required if you have the patience and will power to do so yourself. Just remember if your property manager is not happy with the standard of cleaning when they complete their final inspection, they will ask you to remedy the issues.
- If there’s carpet staining, you will need to steam clean
While many agents will ask you to steam clean carpets at the end of a tenancy (it’s a nice thing to do), you don’t strictly have to steam clean unless the carpet has been stained. If staining has occurred, you will need to make sure you do everything you can to clean up the damage.
- Don’t leave anything behind!
Look around the property before you leave to ensure nothing is left inside. Also, don’t forget to check external areas like storage cages or garages and make sure you’re taking everything with you.
- Let your property manager know if there is any damage
If anything has been damaged prior to vacating it is crucial to advise your agent well before vacating so you can tackle the issue together. This saves headaches in the long run and any claims against your bond.
- If your rent is paid up to date and the property is brought to the original condition as per condition report, with no damages or items left in the property, you will be guaranteed your bond!
For Landlords
- Wear and tear happens
While it would be great to have a brand new property remain in the exact same condition over time, you need to take in consideration wear and tear is natural and should expect this with every vacancy.
- Your tenants don’t have to steam clean your carpets
Your property manager can ask and recommend your tenants steam clean, but they’re under no obligation to do so – unless there is staining.
- Consider maintenance and refresh opportunities between tenancies
It is advised an owner should be maintaining their property every seven years, to ensure they’re property continues to compete well in the market and command the best rent. This could include painting, re-grouting showers, changing carpets or having them dry cleaned after a tenancy. It’s a lot easier to complete these maintenance activities in between tenancies, so if you receive notification of a tenant vacating and think your property could use a bit of an update, now is the best time to do so.
Whether you’re a landlord or a tenant, your property manager is here to help you make the vacating experience as painless as possible. We want to make sure all parties are happy; to ensure the property is returned in a reasonable condition appropriate for releasing, minimising the vacancy for the landlord and getting the tenant back their bond.
Need help finding a new tenant or want to learn more about your property’s rental potential? Click here to request your free rental appraisal or get in touch with the team here.
August Property Market Update with Brad Carlin-Smith
8 reasons why you should engage with a mortgage broker
Overcoming Estate Planning Misconceptions
Benjamin Franklin once wisely wrote that “in this world nothing can be said to be certain, except death and taxes” – and for those working in the estate planning space, we know that if you’re not careful, the first matter can often lead to the second.
Alarmingly, more than half of the adult population of Australia have not executed a will. In my experience, there are two powerful factors discouraging people from seeking a will;
- Accepting that you need a will requires you to accept the finite nature of life – which as humans we are loath to do.
- Wills are associated with lawyers – and lawyers means fees.
However, the reasons not to do a will can be outweighed by the benefits if you allow yourself to start those tough conversations. To help address the stigma surrounding estate planning, let’s address a couple of common misconceptions and how The Hopkins Group can help.
Misconception 1: ‘I don’t need to do any estate planning – I will just go get a will’
We hear this a lot and it’s often the main barrier that clients throw up in response to the suggestion of organising an estate plan. The reality is that an estate plan and a will are entirely different – in fact a will is just one small component of an estate plan.
When we sit down with clients to discuss their estate plan, we have a comprehensive discussion that includes;
- A will
- Enduring powers of attorney
- Appointment of guardians for dependents
- Financial powers of attorney
- Medical powers of attorney
- Superannuation death benefit nominations
- Life insurance death benefit nominations
- Powers of appointment for any applicable family trust
- Drafting of testamentary trusts into a will (where appropriate)
- Tax minimisation strategies
- Asset protection
An appropriate estate plan must be ordered, secure and flexible to reduce the likelihood for potential litigation and to ensure that our clients and their beneficiaries are placed in the best possible position. The Hopkins Group holds your hand through this process from start to finish.
Misconception 2: ‘I don’t have many assets, so I don’t need to make an estate plan’
This is common amongst younger clients, and it also tends to explain the statistical trend of more people having wills past the age of 60.
In some cases, it may even be true that a will is not advisable; but to be honest, I am yet to see one. Let me provide an example:
Jim and Pam are a young couple. They have recently married and have just had their first child, Michael. They are confident that with their net asset position that they do not need a will. They present their asset position as follow:
| Asset | Owner | Net Value |
| Primary residence | Joint | $50,000 (net of mortgage) |
| Super | Jim | $65,000 |
| Super | Pam | $40,000 |
| Total $155,000 | ||
However, what they don’t realise is that Jim has life insurance of $350,000 inside his superannuation policy. Pam also has life insurance she is unaware of worth $300,000. If Jim and Pam were to tragically pass away together, they would leave a joint sum of $805,000.
In this scenario, if Jim and Pam had completed a binding death benefit nomination which favoured their Legal Personal Representative this sum would be dealt with in their will. Furthermore, if they had executed a will that established a testamentary trust for Michael and invested 100% of their assets into this trust, only to be accessed at the age of 18. By the time Michael reaches 18, he will benefit from a full 18 years of compounding interest on their initial lump sum.
Even with a modest asset position, it is important to sort out your affairs.
Everyone works hard for their money, so there is no reason to not work just as hard to ensure that your wealth is distributed in accordance with your wishes upon death.
At The Hopkins Group, we’ve developed our estate planning service to break down the stigma and simplify the whole process for our clients – making it more efficient and less confrontational to create peace of mind.
It’s not an easy topic to think about, but establishing an estate plan is the best way to control the flow of your wealth should the unthinkable happen. If you’d like to learn more, please give us a call on 1300 726 082 to speak with one of our advisers today.
