Budget bonus for first homebuyers
This year's federal budget contained some good news for hard-pressed people saving up to buy their first home.
First homebuyers will welcome the fact that they can now put part of their pre-tax income into their superannuation fund where it can go towards a deposit for a home.
From July 1 2017 individuals can put a total of $30,000 into their super fund, or up to $15,000 per year. Couples can put up to $60,000 into super. From there they get the benefits of growing that nest egg until it's time to withdraw it for their home deposit.
It's a welcome move from the federal government, which has also chosen to leave the rules on novated leasing alone for the foreseeable future. It's a decision that should be welcomed by anyone enjoying the benefits of a novated lease.
That new homebuyer's incentive and novated leasing are two good reasons for ordinary wage earners to take a good long look at the advantages of salary sacrificing.
Salary sacrificing explained
So what exactly is salary sacrificing? Well in simple terms, you arrange for your employer to salary package your income so that they pay some of your bills, or in this case make a super contribution, from your salary. Your tax liability will be reduced, leaving you with more disposable income.
If salary sacrificing sounds like a great strategy to you, well you're not wrong. The benefits of superannuation really mount up over the years, so the earlier you get into the habit of salary sacrificing and squirreling a little more away into your super account the better.
Salary sacrifice your next car
Superannuation is just the start of the benefits available to you when you start salary sacrificing. You can also use salary sacrificing to get yourself a car through a novated lease. By doing that you take the total cost of running a vehicle out of a combination of your pre and post -tax salary – that's finance, insurance, fuel and maintenance.
Novated leasing is a three-way agreement between a leasing or finance company, your employer and you. The leasing company leases you the vehicle while the boss pays for some of it from your pre-tax salary, leaving more in your pocket on pay day - you beauty!
A novated lease generally lasts from one-to-five years, so it's a great way for you to ensure you're always behind the wheel of a late model car offering all the safety and other features available. With vehicle technology moving at such a rapid pace cars are going out of date surprisingly fast, so updating your car frequently through a novated lease is a great way to keep up with the latest vehicle features.
At the end of your novated lease you have the choice of buying your leased vehicle outright by paying off its residual value, extending the lease or getting a brand new vehicle again by trading in your old vehicle, or selling it privately, and starting a new lease.
If you'd like to find out more about the benefits of salary sacrificing and novated leasing call Fleetcare today on 1300 777 600.
Back to previous page
Back to main blog