Question:
Reverse mortgage protection
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
A draft bill was released in August giving better protection for seniors taking on reverse mortgage loans and capping the bank’s recovery amount to the true market value of the property mortgaged.
Where someone has retired they may be asset rich and income poor. They may own their home outright but have limited income on a Government pension. Over the last decade, banks have offered reversed mortgages where the pensioner can borrow significant funds, secured by mortgage over their house and not repay the money until the house is sold or they pass on. Interest compounds and is collected also at that time.
The draft bill would put in place further protections by:
+ Creating a statutory definition of reverse mortgage;
+ Requiring lenders to conduct additional responsible lending inquires;
+ Making regulations about independent legal advice;
+ Terminating the loan contract if the pensioner pays out the reverse mortgage and the loan amount exceeds the market value of the property with the sale proceeds of the property discharging all of the pensioner’s liability and discharging the mortgage over the property;
+ Provided the sale proceeds are market value and that the market value has not been reduced due to deliberate damage, preventing the lender recovering any further amounts from the pensioner which are above the sale proceeds for the property.
WTB 1287
