Home Loan Rate – Australia

Taxes can become costly and they continue to pile up every day.  This is why people try to come up with ways to avoid paying taxes legally everyday.  One way is by letting your employer directly pay your mortgage for you.  Where your employer allows you to salary sacrifice by doing this, you are going to pay less taxes as your gross income is going to be lower.  This is because the money that you ask your employer to directly pay to your mortgage repayments will no longer be considered as part of your income.

However there can be a problem with this, as although you will be paying less taxes, your employer will still be required to pay fringe benefits tax, unless your employer is considered to be an exempt body.  For this reason it may be difficult for you to convince your employer to allow you to salary sacrifice when they will end up spending more.

This should not be the case if your employer is an exempt entity as they do not need to pay the taxes on your fringe benefits.

There are also other ways to use this as a tax shield.  One way is through superannuation.  This means that your salary is reduced by the amount you would like, and it is instead paid to the superfund in anticipation of your retirement.  This effectively reduces your gross income by the amount that you put into the superfund, and assures you of a little more to spend when you retire.

Another way to use this salary sacrifice is to ask for a certain benefit instead of asking for cash.  Due to this fact it is possible to ask for a car to drive, or a computer to use, or various other items you would like to purchase on a regular basis in exchange for a lower gross salary.  However, employers are careful about these types of salary sacrifice as they may be made liable for additional taxes that could cost them more in the long run.

Those with expertise in home loans can show you the correct steps to be taken in order to use this as a salary sacrifice mortgage in order to help you better afford your home.  They can show you the best way to convince your employer to make the home loan repayments and come up with a win-win situation for both parties.