Buying a property together is a major relationship milestone and preparing to buy a property can be stressful. It’s right up there with opening a joint bank account, getting married, and even surviving your first major disagreement. It’s understandable that such a big milestone – and investment – can become highly emotionally charged.

So whether you’re looking to buy your first home, a holiday house or an investment property – if it’s a purchase you’re making with your partner, you need to be clear about what you both want and the steps you’ll both take to get there.

Here’s a guide to getting on the same page and taking the emotion out of purchasing a property together.

Clarify common goals

First you need to determine the purpose of buying the property.

Do you want to live there? Do you want your family to grow up there? Will it serve as a weekend getaway? Or are you hoping it will help fund your future financial dreams?

Making the distinction – and agreeing on it – from the outset is important as it helps you decide what kind of property to buy, the size and type of loan you’ll apply for, and plan for the tax and budgeting implications of the purchase.

If you’re looking at the property as an investment, you may want to consider speaking to a financial adviser about whether property is a well-suited investment at this age and stage of life.

Determine how costs will be shared

Stamp duty, conveyancing and title transfer fees are just the tip of the iceberg when it comes to the costs associated with the purchase of a property.

As time goes on there will inevitably be rates, maintenance and repair costs, insurances, maybe even renovations and body corporate fees.

These ongoing costs can add up, so be sure to put a plan in place regarding how you will share them from the outset. Your plan may involve opening a joint bank account or offset account.

Ownership structure

There are two main ways you can own a property with your partner: tenancy in common or joint tenancy.

Tenancy in common essentially allows you to own a defined share of the property and, if you die, bequeath that share according to your will.

Joint tenancy, on the other hand, means that if one owner dies, the surviving tenant takes ownership of the property.

Other ways to own a property include through a trust, self-managed super fund, or a company.

It may be a good idea to seek legal, tax and financial advice on what structure is best for you and your situation.

Co-ownership agreement

It’s not particularly rosy or romantic thought, but when you’re heading into the purchase of a property with someone else it may be wise to have a lawyer draw up a co-ownership agreement.

This agreement can set out who lives at the property, who is responsible for maintenance, what happens if one of you dies or becomes bankrupt, and how the property should be sold if one of you no longer wants your share.

In the case of an investment property or holiday home, the agreement can outline how rent is to be distributed, or when certain people can use the property.

A co-ownership agreement can be particularly useful if you have different interests in the property or mortgage, however, it may not be binding in the event of a marriage or de-facto relationship breakdown if it’s not properly drawn up and made binding, so it is important to always consult a lawyer when setting up this type of agreement.

Safety net

It’s important to note that if you take out a joint mortgage on the property you may be held liable for the entire debt.

For example, if you apply for a $500,000 loan together, but plan to split the repayment obligations 50/50, under the terms of the loan you may not only be responsible for your $250,000 share, but for the whole debt of $500,000. So if your partner defaults on their payments, loses their job, or becomes ill and cannot work, you could be stuck making up their share of the repayments. And vice versa. As such, it’s important to seek legal and financial advice, which we can help you with, as to your mortgage repayment obligations, as well as your property ownership rights.

The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.

Exercise can be incredibly beneficial for the body, but it’s also great for the mind. So what are you waiting for? Get moving! Let’s explore some of the mental health benefits of exercise.

We all know the feeling – that buzzy, warm glow we get after exercise. Whether it’s a gentle jog, playing footy with the kids or lifting a personal best, exercising makes us feel good. But it isn’t just the smug satisfaction of knowing we’ve been active for the day (although this is pretty nice too) – there’s a scientific reason why moving our bodies makes us happy.

It all comes down to processes in the brain. According to the Australian Medical Association, exercising releases neurotransmitters into the brain called endorphins and serotonin. These chemicals have mood boosting properties that leave you with the so-called ‘runners’ high’. Endorphins help to encourage positive feelings and can provide relief from conditions like anxiety for hours after exercise is over. The mental health benefits from this have been shown to have ongoing benefits on the mind and body.

Exercising for the brain

Endorphins aren’t the only reason why exercise is great for the mind. According to Health Direct, a raised heart rate during exercise pumps more blood to your brain, increasing your ability to think clearly and helping to improve your memory skills.ⁱ

Wearing yourself out with physical activity is bound to help you sleep better at night. This can lead to a number of health benefits for both the body and the mind, and everyone knows how a good night’s sleep can enhance your mood! Having a good nights rest is vital and has numerous mental health benefits.

Exercising for you

Keeping fit and active is an important part of building and nurturing self-esteem. The process of training and seeing improvement in skills or changes to your physique is hugely beneficial for confidence, not to mention the mood-boosting properties of being outdoors in nature or spending time with friends playing social sports.

How much exercise should I be doing?

HealthDirect suggests a minimum of 30 minutes of moderate to intense exercise every day. You can make up 30 minutes over the day by combining shorter 10-15 minute sessions.

Here are some ideas to get you started:

• • try a brisk walk to the shops rather than taking the bus

• • join a social sports team after work

• • hit the pool for some laps

• • instead of meeting a friend for coffee, go for a walk in the park

It’s important to find the type of exercise that suits your preferences and lifestyle – that way you’re far more likely to keep it up.ⁱ

Make sure you’re protected

When trying new sports and getting active outside, it’s important that you have the right protection in place. Consider income protection insurance so that, if the worst should happen, you can recover safe in the knowledge that you may be eligible for an alternative source of income to protect your family.

Call us today and we can discuss your options.

i https://about.healthdirect.gov.au/linking-to-us

The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.

The end-of-financial-year period isn’t really a time most people relish, but it does offer an excellent opportunity to review your finances and possibly free up funds for more important and enjoyable pursuits. We take a look at 5 Steps to Make Income Tax easier.

Below we’ll show you, in five easy steps, how to streamline the income tax return process and possibly free up funds for the more important things in this great Australian life.

Step 1: Learn what you can and can’t claim

Many people don’t take the time to understand what they can and cannot claim as a tax deduction.

If you’re guilty of simply sliding a box full of receipts across your tax agent’s desk, now’s an important time to learn, especially as the ATO announced they’ll be cracking down on ‘other work-related deductions’ this year.ⁱ

That said, you don’t want to miss out on any work-related deductions that you’re legally entitled to claim.

So when you sit down with your registered tax agent to discuss your tax return, take the time to learn exactly what you can and cannot claim.

Step 2: Stop mixing business with pleasure

One of the reasons many people find tax time painful can be put down to the ‘work related expenses’ scavenger hunt we’re forced to undergo.

That’s because too many people get paid into a bank account, linked directly to a debit card, and then start spending without a plan.

However, this creates the risk that your work-related expenses and personal transactions will become all mixed up.

Establishing a work-expenses bank account that’s separate from your personal bank account can be a quick and cost-effective way of helping to identify your work-related expenses for your next tax return. Remember you need to have written evidence that you spent the money, what you spent it on, who the supplier was and when the purchase occurred and that the expense had a direct connection with deriving your assessable income. Bank or credit card statements usually won’t contain all the information you need to keep on record so read Step 3.

Step 3: Use apps to make life easier

Why keep track of all your expenses if you can download an app to do so for you?

The ATO’s myDeductions app helps you save and store accurate information about your deductions throughout the income year – ensuring no expenses slip between the cracks.ⁱⁱ

The information can then be provided directly to your tax agent, or uploaded directly to myTax, which you can access through myGov.ⁱⁱⁱ

Step 4: Salary sacrificing

Once you’ve gone through the process of identifying and collating the written evidence for work-related deductions, refer to ASIC’s MoneySmart website to see if there are any expenses on the list that your employer might consider allowing you to salary sacrifice.^iv

As stated on ASIC’s MoneySmart website, salary sacrificing is generally a tax-effective option.^v

It helps you save on tax by allowing you to forego your salary in return for non-cash benefits. In doing so it reduces your taxable income, and thus, reduces the amount of income tax you pay.

Expenses and items that can typically be salary sacrificed include laptops and computers, car parking, childcare, superannuation contributions and some insurance premiums. Fringe benefits tax may apply to certain expenses and items and if it applies you should check whether your employer will pass the cost of that tax onto you.

Step 5: Protect your family’s way of life

One way to set yourself up for the year – and an important way to use the extra tax funds you’ve freed up in the previous steps – is to invest in the right type of protection for you and your family.

As we explained in the previous step, salary sacrificing is one strategy to save on life insurance.

But even if your employer doesn’t offer salary sacrificing, you may be able to claim tax deductions for income protection insurance premiums.

Income protection premiums for insuring against loss of your income should generally be tax deductible.

~ Please note that Australian tax law is complex and varies depending on your individual circumstances, so to make informed decisions always seek tax advice from a registered tax advisor.

i https://www.ato.gov.au/Tax-professionals/Newsroom/Income-tax/Focus-on-work-related-expenses/

ii https://www.ato.gov.au/General/Online-services/ATO-app/myDeductions/

iii https://my.gov.au/LoginServices/main/login?execution=e3s1

iv https://www.moneysmart.gov.au/managing-your-money/income-tax/salary-packaging

v https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/super-contributions/salary-sacrifice-super

The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.

On 14 March 2019, the government introduced a package called “Protecting Your Super”which was designed to protect superannuation accounts. It was designed to prevent inactive superannuation accounts from being eroded by inappropriate insurance arrangements, as well as protect small balances from being eroded by fees. The new legislation, which was called Protecting Your Super is now law and the measures will start applying from 1 July 2019.

One of the major components of the protecting your super legislation is that superannuation funds are no longer able to provide insurance to members with an inactive superannuation account. However, the member can make an election to retain the insurance cover. If your superannuation account is deemed to be inactive and you do not contact your existing superannuation fund prior to 1 July 2019, the insurance will be cancelled.

Superannuation funds are in the process of contacting members that are affected. However, it is suggested that if you are unsure or have not heard from your superannuation fund that you call them to check if this impacts your insurance within superannuation. If you are unsure or are unable to check with your superannuation fund please let us know and we will happily investigate further for you.

Protecting Your Super and Low Balances

Under the new legislation an account is deemed to be in active for insurance purposes if they have not received a contribution in the last 16 months or have not received a rollover for the past 16 months. Another part of the protecting your super legislation is that all superannuation accounts which meet the following criteria are required to be transferred to the ATO:

1. The account is below $6000
2. No life insurance is held in the account
3. The member has not met a condition of release
4. The account has been in active for a continuous period of 16 months

Some of the benefits of the Protecting Your Super legislation is that there will be a 3% cap on Investment, Administration and Indirect Costs for balances under $6000 and a ban on exit fees regardless on the account size.

Protect Your Super and Insurance

The new legislation will impact insurance arrangements within super that are in place before 1 July 2019, as well as any insurance taken out on or after 1 July 2019. The trustees of the superannuation fund are obligated to notify members who have insurance in place before 1 July 2019 and who might be affected by the new legislation. This is to provide them with an opportunity to keep their existing insurance.

On 1 April 2019, superannuation funds identified members accounts that have been inactive for a continuous period of six months (from 1 October 2018 to 31 March 2019). Prior to 1 May 2019, the trustee must give those identified members written notice that there insurance may be impacted. The notice would’ve stated that from 1 July 2019 that the insurance will no longer be provided by the superannuation fund and that the account remains inactive for 16 months or that the member has not elected to maintain insurance cover. The notice will also set out the method by which the member may continue their insurance.

So what can you do…

Members who have an account that is deemed inactive immediately before 1 July 2019 who want to maintain insurance will have a few options.

1. They can either contribute or rollover an amount to their superannuation account prior to 1 July 2019 to make it active.
2. They can submit a valid election in writing to the Super Fund prior to 1 July 2019 to obtain or maintain insurance cover.

Members whose accounts become inactive after 1 July 2019 will have to either contribute or rollover an amount to their superannuation account prior to 16 months of inactivity or submit a valid election in writing to the Super Fund prior to 16 months of activity to obtain or maintain insurance cover.

The final option is to do nothing, which may result in you having an inactive account after 16 months and the insurance will cancel.

By contributing or rolling over funds to a superannuation accounts this will only rectify the inactivity for 16 months. Alternately, if a valid written election to their fund is made this only has to be done once, the election will apply for the future.

Please note that the new insurance rules do not apply to:

• SMSFs or small APRA funds, or
• defined benefit members, or
• Australian Defence Force (ADF) Super members (or a person who would have been an ADF Super member if they had not exercised choice), or
• members who have an employer who makes contributions to a fund on their behalf. If this is the case, this is in addition to superannuation guarantee obligations and these contributions cover the full costs of the member’s insurance premiums.

How to check if you are impacted…

The easiest way to check if you are impacted by the new legislation is to contact your superannuation provider and ask them. If you are unsure what superannuation accounts you have then you could login to MyGov, go to the ATO section and under the ATO section it will list all your superannuation accounts.

The final option is to check the letters that your super funds are obligated to send you. The only issue with this option is that the super fund would need to have the correct address listed.

In the future

The regulation requires a trustee to provide a written activity notice to clients who have an account that has been inactive for a continuous period of 9, 12 and 15 months. The activities notice will state:

1. The length of time the account has been in inactive,
2. The account will be active again if a contribution is paid into the account,
3. The date on which the insurance will cease to be provided if there is no activity,
4. The amount of insurance fees charged in the funds most recent income year,
5. The amount of insurance likely to be charged on the funds current income year,
6. If the insurance will cease due to the governing rules of the fund or due to the client not electing to maintain insurance,
7. Set up whether or not it is possible for the member to elect to maintain insurance and if so the method by which the member can make the election.

If you have received any communication of this sort or suspect that you may be impacted by this new legislation please contact your existing superannuation fund to check. Alternatively, we would be happy to do a review your insurance to see if you are impacted. Please send us an email at contact@listerfs.com.au

The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.