Hello,
I am a sole parent with 2 small children. I still owe money on my own home and own an IP outright, which I brought for 135,000. Does anyone know what the maxing amount is for IP before the parenting payment is cut off, or does it just get reduced, because I would like to buy another, but could not afford it if the parenting allowance cuts off.If you buy an IP and most of the value of the IP is in your loan, it will not affect you really for the assets test. The income test will be nil if the property is either positively geared & negatively geared tax wise or it is fully negative geared.
If you wish to get further clarification talk to Centrelink's Financial Information Service (FIS) officer for more details as to how it will affect you. A good FIS officer should be objective about any investment and should have no alliance to different products such as shares and super.
Good luck
Michael
Aren't centrelink benefits determined on total assets (not net asset base)?
Do check because I thought that negatives were added back as a positive (yes I KNOW this doesnt make sense…..but we are talking about centrelink), at least they used to be.
With the assets test for investment property, the nett assets are taken into account – Value of the property less loan to purchase the property. For the income test if expenses are greater than income, it is assessed as nil. This is for Pensions and Allowances.
Yet in saying that, for Family Tax Benefit (FTB), it is a different story. If real estate is negatively geared, whatever the loss is, this loss is added back on to your Taxable Assessed income. EG If your Taxable Income is $50,000 (which includes the negative geared loss of say $10,000), the $10,000 is added back on to be assessed as $60,000.
I did work for this organistation for 22 years but have been pleased that I am now able to move on working in my own finance business with Loretta.
Any other queries re Centrelink or similar, please just ask.
Regards,
Michael
It is an amazing situation when you can only claim back the marginal tax rate of the negative gearing, So you lose 70% to gain say 30%. Then if you happen to make a capital gain this will be deemed as income by centre link even though a capital loss is not seen as a loss of income.
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