There was some interesting news for doctors in this weekend’s Australian Financial Review. Please find below a brief summary of how various news items affect doctors.
High-end property harder to finance
Banks are starting to enforce stricter lending terms and conditions for multimillion dollar properties. These types of property deals will be more closely scrutinised, which may force buyers to come up with bigger deposits, and which may make refinancing from one bank to another more difficult.
If you are a doctor and you are purchasing or refinancing this type of property, you should seek advice from a finance specialist beforehand, to make sure you look at all the options.
The 30% Division 293 tax to cost many doctors over $100,000 in lost super
It is estimated that more half a million people will be slugged with 30% contributions tax within a decade, because of the flagged reduction in the Division 293 threshold to $250,000. Many doctors will unfortunately find themselves in this group. Rice Warner estimates that those affected may lose up to $150,000 in super savings over a 20-year period.
It is important though that doctors do not make a knee-jerk reaction and jump into high-risk tax-driven strategies, but rather seek professional advice.
Interest rates are set to rise
Whilst there is no immediate danger of a rise in the official interest rate, there are some signs that rates may be on the way up next year.
As doctors typically carry high amounts od debt, now would be a good time to look at your finance structures and facilities in a holistic way and plan ahead.
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