December 2022 Newsletter
Seasons Greetings. – two Government Handouts and Crypto News
Grand Seasons Greeting to all our friends and clients
We have very much enjoyed sharing 2022 with you and look forward to a prosperous and Joyful 2023 together.
Our final newsletter of the year updates you on two large government handouts and a short Crypto update.
The first handout is the federal support for plug-in hybrid cars and electric cars. One of the key measures is that such cars can be purchased by an employer without paying fringe benefits tax.
The second one is the NSW government just-legislated Shared Equity Home Buyer Helper where under certain circumstances, the government becomes a co-owner of your home and you only need a 2% deposit plus purchasing expenses such as stamp duty (from which first home owner are exempt) to get started. If you buy a home the government will pay for up to 30% (if you buy an existing home) or 40% (a new home) of the property and becomes a very benign co-owner of the property with you. You can buy out the government at any time. This will allow many people who have little or no deposit and who don’t earn too much and are not too wealthy to buy a home they otherwise couldn’t afford.
There is no rush for the federal car scheme but there are only 3,000 places per financial year for the NSW offer so anybody who qualifies and would like to participate needs to move NOW.
The Federal Government scheme to support plug-in hybrids and electrical cars
Employers typically don’t pay for their employees’ cars unless they are used for business or are utes as they will have to pay fringe benefits tax. That is why the top two cars selling in Australia are utes in the form of the Toyota Hilux and the Ford Ranger, neither of which attracts fringe benefits tax.
The new Labor government allows the same tax treatment for all plug-in hybrids and all-electric cars up to $84,916. Electric cars are not for everyone as they are expensive to buy and charging them on the road can take some time, though enthusiasts love their responsiveness and not needing to purchase petrol. Plug-in hybrids are basically normal petrol cars with an additional electric motor and battery which can be charged via a power cable in your garage. It is called “hybrid” because it combines an electric and petrol engine, and “plug-in” because you can charge the battery from household electricity.
Plug-in hybrids have been around for a long time and you can find used and new ones from under $20,000 though cars with less than 60,000 km start from $35,000.
If you have an employer (which may possibly be your own company – ask your accountant to clarify) who will participate, then the employer can write off much or all of the purchase price and pass these savings on to you. If you earn $50,000 or more then this could be a very worthwhile saving or allow you to afford a more expensive car.
Electric cars are also available from under $20,000, though you will get better cars if you spend over $35,000 as well.
If you are in the market for a replacement of your current car and don’t want a ute, then this is worth considering as it is available for all buying a car in Australia.
The NSW Shared Equity Home Buyer Helper
This scheme only applies in NSW, is limited to 3,000 properties per financial year, starts on January 23rd 2023 and is administered by Bendigo Bank. I expect those 3,000 places to go very quickly. The NSW government website explains the rules well and to me those rules are very generous. Further details are here.
To be eligible you need to be either (a) a single parent with a dependant child, (b) a single person 50 years or older or (c) be a first home buyer and member of a small number of professions: nurses, midwives, paramedics, teachers, early childhood educators or police officers.
One of the very generous features is that you can be a nursing assistant, which only requires a Certificate III and can be done in weeks or, even more generous, training for a Certificate III in child care, i.e. not even be qualified, just in training and working in that area and you qualify.
Once you qualify, these original conditions don’t apply any more. You can change jobs, have a partner or your children leave home. You only need to take care of the property and live in it and not earn more than the limit ($90,000 for singles, $120,000 for couples) for more than one year at a time.
If you consider you may be eligible, read the government links carefully. A lot of people might qualify who would never think they would.
A short remark on cryptocurrencies
One of the biggest cryptocurrency exchanges (which are functioning very similarly to a bank), FTX, just went broke and was exposed as fraudulent right from the time of foundation.
Currently there are two major exchanges, Coinbase, which has its shares on the American tech share market NASDAQ and is audited by Deloittes and the biggest, Binance, which is still in operation but shows many signs of danger such as no independent auditor, no disclosure of finances etc.
I am not in favour of cryptocurrencies, to me it is buying fake money with real money. However, if you do own or choose to own cryptocurrencies then you may wish to discern which exchange you use.
Christoph and Nicola will be working every day throughout the holiday season and most of the rest of the team are back first thing in January, so do feel free to contact us at any time if you have any questions, require support, a review or to say hello!
With love from the Team at In Your Interest Financial Planning,
Christoph, Nicola, Marian, Clare, Deryk, Alvin, Jade and Ann-Marie
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