Are you on the NBN? You could be entitled to a big refund

,

Ahh, the NBN. Depending on where you live it’s either lightening fast, or so agonizingly slow that you want to pull your hair out. Well, the good news is you could be entitled to a refund worth hundreds of dollars.

Over the last 15 months the ACCC has been negotiating with internet service providers to offer their customers a refund if warranted.

Telstra, Optus, TPG, iiNet, Internode, Dodo, iPrimus and Commander have each admitted that they likely made false or misleading representations about their connection speeds.

So now the ACCC is “urging” you to contact your retail service provider (RSP) to see if you’re eligible for a refund which, in many cases, is worth a few hundred dollars.

That’s a decent injection to help you pay off your mortgage, bills that have accumulated over Christmas, or even some spending money over the upcoming Easter holidays.

Why you might be entitled to a refund

Ok, so when you signed up to the NBN, the RSP that sold you the plan most likely advertised it with maximum theoretical speeds.

This might have looked something like: “100 megabits per second (Mbps) download and 40 Mbps upload” speeds – aka 100/40.

However, if you’re on a FTTN (fibre-to-the-node) or FTTB (fibre-to-the-building) plan, you probably aren’t getting anywhere near those speeds because there are existing copper lines connecting your building to the NBN network.

Put simply: copper = unreliable connections and slower internet speeds.

It’s mainly FTTP (fibre-to-the-premises) that can really reach the advertised theoretical speeds, as it doesn’t rely on any copper for the internet connection.

You have (unopened) mail

Since November 2017, the RSPs were meant to contact more than 142,000 affected consumers to offer them a range of remedies, such as moving to a lower speed plan of their choice, or exiting their contract and receiving a refund.

However, two in three affected consumers – roughly 100,000 households – have not responded to the letter or email from their RSP.

“They may be eligible for refunds, some in the hundreds of dollars,” says ACCC Acting Chair Mick Keogh.

“The ACCC is urging NBN customers to contact their NBN retailer if they have received a letter or email offer of a remedy, or think they might be entitled to a remedy.”

You might even be entitled to a refund if you’re a new customer, too.

Within four weeks of signing up, RSPs must check their speeds and if the speeds are below those advertised for the plan the consumer chose, the RSP must offer remedy options.

How much you could be refunded

Ok, let’s say back in December 2016 Anne purchased a 100/40 NBN plan from a Telco at a cost of $100 a month.

In December 2017, Anne would have received an email from her Telco advising that her connection was only capable of maximum speeds of 37 Mbps download and 13 Mbps upload.

This means she was unable to receive the full benefit of the 100/40 plan.

In the email that was originally sent, but that Anne missed or overlooked, the Telco offered her the following options:

Option 1 – Move to a lower plan of her choice, such as a 50/20 or 25/5 plan, and receive a refund of $360.

Option 2 – Exit the plan without cost and receive a refund of $360 for the difference in plan prices.

Option 3 – Remain on her current plan with no refund.

In this example, with a maximum speed of 37 Mbps download, Anne could receive the maximum speed of the 25/5 plan but not the 50/20 plan.

Therefore, Anne is entitled to a refund of $360, which is the difference between a 100/40 Plan and 25/5 Plan ($30 a month) over 12 months.

All she has to do is let her Telco know.

Your next step

This is the simple part. Simply get in contact with your RSP and see if you’re entitled to a refund.

The ACCC is on their case about it so it should be fairly straightforward and the customer service representative will know what you’re referring to.

Good luck!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Do you Airbnb your property? The ATO has you in its sights

,

Sharing is caring, right? However, when it comes to the sharing economy, the ATO is feeling neglected and wants its fair share. Here’s what you need to know if you rent out your property on Airbnb.

If you need any more convincing that the Australian Tax Office (ATO) will be cracking down on undeclared income from sharing economy platforms such as Airbnb this year, check out the name of the consultation paper that Treasury released this week:

‘Tackling the black economy: A sharing economy reporting regime.’

Now, the number of Australians involved with “the black economy” is quite hard to quantify, but Treasury has given it a crack.

They believe almost 11 million Australians earned extra money from sharing economy services – including Airbnb, Uber, Uber Eats, Airtasker, Parkhound and many other platforms – from July to December 2017.

And while Airbnb doesn’t release any official data, independent monitoring website Inside Airbnb says listings in Australia grew from 43,610 in 2016 to 89,863 in December 2017.

No wonder the tax man feels like he’s missing out.

Consultation paper findings

It’s no secret the ATO is well aware that a lot of people haven’t been declaring income from sharing platforms in recent years. In 2016 they released this video, and more recently built this information webpage.

However this consultation paper is the clearest indication yet that a tax crackdown is nigh.

“During its consultations, the Taskforce heard that as the sharing economy grows there is an increasing risk that sellers may not be paying the right amount of tax,” the report states.

“The ATO has already begun to work with businesses on a reporting regime, obtaining information from some ride-sourcing providers and accommodation providers under its formal information gathering powers.”

In a nutshell: the ATO will be granted access to your Airbnb and Uber income data if they require it.

What to do?

Well, if you’re not already, then it’s time to start keeping accurate records of the income you’re earning in the sharing economy space. That includes platforms such as Uber, Airtasker and many other players.

Declaring the income is straightforward and just like any other form of income you earn: basically keep statements showing income from your guests, and don’t forget to keep receipts of any expenses you want to claim deductions for. That will make it straight-forward come tax time.

It might be worth checking out this information page from the ATO for further tips.

Finally, keep in mind that if the ATO is cracking down in this space they might also look more closely into some of your past tax returns. In which case, here’s what you need to know about correcting a past income tax return if declaring income in the sharing economy space slipped your mind in the past.

It may increase the tax you owe, but the ATO generally treats it as a voluntary disclosure. You’ll still have to pay any outstanding tax, but you’re likely to receive concessional treatment for any penalties and interest charges that apply.

If you’d like any further information on this new and emerging space, feel free to get in touch. We’d be happy to help out.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Property buyers are increasingly turning to mortgage brokers

, ,

Excuse the humble brag, but property buyers are turning to mortgage brokers in record numbers. Here’s why that’s great news for the both of us.

Ok, ok, sure, we know we’re beating our own drum a little here.

But there’s a good reason why, we promise.

Firstly, it’s fantastic to see that at a time when the royal commission is dominating headlines and consumer confidence in the big banks is tanking, our industry is proving worthy of people’s trust.

During the September 2018 quarter, mortgage brokers settled an unprecedented 59.1% of all residential home loans.

That’s up from 53.6% in 2016 and 55.7 per cent in 2017 over the same period.

MFAA CEO Mike Felton points out that the result reflects not only the trust and confidence customers have in their mortgage broker, but the systemic importance of the mortgage broking industry.

“As banks have persisted in making it more difficult to secure a loan, turning many would-be borrowers away, consumers have continued to increasingly utilise the broker channel for experience, expertise and greater market choice to secure access to credit,” Mr Felton says.

Take that, banks

The figures emerge as the big banks continually try to curb the effectiveness of mortgage brokers. And it doesn’t take Einstein to figure out why: mortgage brokers promote a more competitive lending market at their expense.

According to Deloitte Access Economics, over the past three decades brokers have contributed to the fall in net interest margin for banks of over 3% points. This saves you $300,000 on a $500,000 30-year home loan (based on an interest rate fall from 7% to 4% pa).

Furthermore, on average, mortgage brokers have 34 lenders on their panel, and 28% of the time arrange residential loans through lenders other than the big four banks.

“In addition to providing customers access to a panel of 34 lenders on average, brokers are ideally positioned to help customers, especially those with more complex lending scenarios, to understand the ever-evolving application process and provide the information necessary to meet changing lender requirements,” adds Mr Felton.

Current model under threat

There’s been a recent push by at least one of the big four banks to make the customers pay for the services of a mortgage broker. If they had their way, that would be an industry-wide standard.

However, news that more and more customers are flocking to mortgage brokers under the current system will hopefully help us both out in the long run.

Better yet, a recent report shows that 9 out of 10 customers are satisfied with the services provided by mortgage brokers, so we sincerely thank you for your support.

Got a minute help us out a little more?

Besides continuing to use our services, and recommending us to family and friends, another way you can support us is by contacting your local MP to let them know you’re happy with the mortgage broking service we’re currently providing.

By letting your local Federal Member of Parliament know this you can help prevent the cost of our future services being transferred from the bank over to you – and you’ll also be showing your support for us.

If you’d like any more information on this issue don’t hesitate to get in touch. We’d love to speak to you more about it.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

New Year, New You!

Each year we make New Year’s resolutions that focus on our health and wellbeing. But how often do we think about improving our finances? Here are five financial New Year’s resolutions that could help you start 2019 with a bang!

You might have missed it over the silly season, but the good news for mortgage holders is that many economists are tipping that we won’t see the RBA announce a rate rise in 2019.

Indeed, three leading economists now believe we may even see an interest rate cut this year. (Although, as we saw in 2018, that doesn’t necessarily mean the banks will follow suit).

But instead of sitting around waiting for the RBA and the banks to make a move that could save you money, here are five New Year’s resolution ideas to help you out in 2019!

Resolution idea #1: Cut back on the credit card purchases

The average card holder is paying around $700 in interest per year if their interest rate is between 15 and 20%, according to ASIC.

That $700 is nothing to sneeze at. It’s enough to purchase a new suit or outfit to help you land that new job, fund a year’s worth of home and contents insurance, or take the family on next summer’s camping trip.

Additionally, as of January 1, banks and credit providers are now required to check your debt-servicing capacity more thoroughly before issuing a credit card.

That means if you’re planning to load up on one credit card, and then transfer the debt to a card with a lower interest rate, you might find yourself out of luck.

With that in mind, the next question to ask yourself is: do I really still need a credit card if a debit card will suffice?

Resolution idea #2: Get a home loan health check

Whether the rates go up, down, or stay where they are, it never hurts to get a home loan health check to make sure there’s not a more suitable home loan out there for your situation.

Because while the RBA kept their rates on hold throughout 2018, not all banks did too.

In fact, every single one of the Big 4 Banks increased interest rates in 2018. To make sure you’re still happy with the rate you’re paying compared to what’s available in the market, give us a call.

Resolution idea #3: Purchase less take-away coffees, alcohol and other items

Buying a $4 take-away coffee each day costs you a whopping $1460 per year. Making it yourself using a French Press or Moka Pot can cost just $260 – a saving of $1200.

The lure of micro-transactions – purchases that are low in cost and trivial in nature – can be a real obstacle for those trying to achieve their financial goals.

Other micro-transactions that most families can cut back on include alcohol, take-away food, gym memberships, and multiple entertainment subscriptions such as Spotify, Netflix and Foxtel.

Resolution #4: Ask your employer about salary sacrificing

Salary sacrificing – also known as salary packaging – is generally tax-effective for people who earn more than $37,000 a year.

It helps you save on tax by allowing you to forego your salary in return for non-cash benefits, including car leases, childcare, student loans or superannuation contributions.

It all depends on your employer and the industry you work in but there are three broad categories of things that can be packaged: things that attract fringe benefits tax (FBT), those which do not, and superannuation.

If you’re interested in exploring your options, make an appointment with your employer when you get back into the office this month to see if they can make it work for you!

Resolution #5: Review your insurance, superannuation and banking costs

Whether it’s your home and contents insurance, your car insurance, or a life insurance policy, by calling three or four insurance companies, getting quotes, and then comparing, you can save hundreds of dollars each year.

While you’re at it, make sure you don’t have more than one superannuation fund. If you do, consolidate it by following these steps to avoid doubling up on fees.

Finally, look into your banking fees. Just like a home loan there’s often a better deal out there, so make sure your bank isn’t taking you for a ride!

Final word: Set a financial goal

If you’re not back at work yet, then use this precious time to carefully consider what financial goals you want to achieve in 2019.

It could be saving up for a long overdue holiday, putting away more money towards your kids’ education, or buying an investment property.

If you’re stuck for ideas, come in and have a chat to us. We’d be more than happy to help you identify goals, and can also help with some of the suggestions listed above.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

APRA to remove restrictions on interest-only home loans

,

Here’s some good news to kick off 2019: APRA is removing its restrictions on interest-only residential mortgage lending from January 1.

The restrictions were put in place as a temporary measure by the Australian Prudential Regulation Authority (APRA) back in March 2017 to encourage lenders to adopt sound lending practices.

So why are they being removed now?

APRA’s announcement comes just weeks after CoreLogic figures showed Australia’s housing market recorded its weakest conditions since the Global Financial Crisis (GFC).

National dwelling values slipped by 0.7% over the month, led by Sydney where the drop was double the national average.

As such, many pundits believe the restrictions are being lifted to prevent the housing market from sinking further.

APRA, however, is claiming it’s simply a case of ‘mission accomplished’.

It says the restrictions have already led to a marked reduction in interest-only lending, which is now significantly below the target of 30% of all home loans that lenders issue.

Is the restriction removed for all lenders?

Most, but not all.

Earlier this year APRA announced it would remove its 10% restriction on investor loan growth for lenders who could prove they had strong lending standards.

Lenders who have passed this test will also no longer face restrictions on interest-only home loans.

But for lenders that haven’t yet proven the strength of their lending standards, the restrictions will remain in place until they do so.

“APRA’s lending benchmarks on investor and interest-only lending were always intended to be temporary,” says APRA Chairman Wayne Byres.

“Both have now served their purpose of moderating higher risk lending and supporting a gradual strengthening of lending standards across the industry over a number of years.”

What does this mean for you?

With the restrictions lifted, it should now be easier for borrowers to secure an interest-only loan from January 1.

If that sounds like something you’d be interested in, give us a call. We’d love to help out.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.