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The Number of people who refinance is increasing significantly

The Number of people who refinance is increasing significantly

The economy of Australia has suffered a lot due to Coronavirus COVID-19. The government of Australia has taken and they are still taking many steps to get the Australian Economy back on track. Right now there are thousands of cashback offers, fee waivers available to the people of Australia. An interest rate that is below 2% also makes the desire to refinance even stronger.

At the time when COVID-19 was on the highest point, the home budget was under stress. To tackle this situation, there were several schemes that minimized the costs of this field. Such a change caused a lot of people to refinance. If you look at the recent data, you will find that the number of people refinancing has increased with a rate of 30% in April and May.

But the recent data for the month of June and July has revealed that the number of refinancers has decreased by 12%. However, the comparison of the increase in the number of refinancers shows that their number has increased by 39% on yearly basis.

An analysis by Canster shows that more than $53.7 billion has been refinanced by the property owners in Australia and that too in the last six months.

The number of new loans has decreased tremendously over the last few months as the market is not open, restrictions are still there, so no one wants to take the risk right now. So businessmen who have not fully cleared their earlier debts are trying to get every help possible. This is the reason why the number of refinancers has increased these days.

The introductory interest rates are which are less than 2% right now and the highest cashbacks on some of the loans have gone up to $4000.

So, what are thinking, should you get one?

There is one thing to note that all such offers on loans is available on only such products that has not much competition in the market. This is a step to provide short-term help to those businessmen that would ultimately help them in the long-run.

This relief in the loans that you borrow right now seems very attractive but you should be taking the loan over your remaining identical period. Because if you don’t do so, you will pay even more money.

Another technique that can offer you more value, this you can do by moving your mortgage and keeping your repayment amount static.

What about the situation of first home buyers?

Recent data has shown that the number of first home buyers is also increasing. Such an increase shows that the steps and measures taken by the government are working for them. The number of first home buyers is increasing day by day and along with the amount of money, being lent to them. The rate of increase in the number of loans is 14% in the last month and 24% over the past year.

According to a property expert Steve Mickenbecker, this growth is higher than that of one year ago (when there was no effect of Corona on the market). And the average variable rate of interest is 0.53% lower than a year ago. This is the reason why you get maximum benefits if you increase your shopping capacity.

Banks are tempting customers to refinance by offering cash for this process

As the situation seems to get normal after the effects of Coronavirus is decreasing day by day, banks are trying to lure the customers to refinance by giving the customers cash for refinancing.

These offers are coming in the form of incentives and cashback to the customers. As everyone is quite short on money right now, everyone is looking for some good deal whether it be a home loan or any other transaction. So, the banks are making it easier for the customers to get home loans.

The rate of refinancing is increasing day by day because people are looking for cheap interest rates and the banks are providing the same.

People are seeking the best offers and it can be proved by the data of the Australian Bureau of Statistics. The data shows that around 113,000 people have changed their lenders in the last four months.

According to Sally Tindal (the director of RateCity), bankers are always looking for refinancers because the refinancers are considered more stable borrowers.

Refinancers have gained such a reputation because all those people who are able to refinance have a good record of paying their debts, and a steady job. These two factors alone are enough to make them stable. There are over 22 lenders who are offering cashback up to $4000. Many financial experts are saying that such offers are more effective in uplifting the economy as compared to providing cash incentives. Most of the banks in such offers have quite competitive rates which would help the people in getting cost-effective loans right now.

Take a look at the list of the banks and their efforts to correct this situation:

NAB, Westpac, Commonwealth Bank will provide $2000 to all the new customers and at the same time, ANZ will give $3000 to its refinancers.

Suncorp is offering the frontline workers of COVID-19 up to $4000 if the workers want to refinance.

The same is the case with Bank of Melbourne and St George that are also offering up to $3000 cashback for refinancers.

After seeing this, you can easily conclude that the banks are fighting hard to tackle this issue on many fronts.

The number of Australian who refinance has increased sharply with the fall in home lending

There has been a tremendous drop in home lending that has caused a large number of Australians to refinance their homes.  In May Australia has seen the biggest ever drop in home lending that was by an amount of 11.59%.

Due to the effect of this the Australian market dropped by an amount worth $2.15 billion. But as per the statement of the Australian Prime Minister, there is no need to worry.

In a statement, he said that it is not appropriate to make any assumption about the future of the Australian market. This is because the demand has always been more than the supply. And the good news is that the above statement is relevant to the markets which are hit the most by this pandemic. Since the demand has always been more than the supply in the Australian market, there is nothing to worry about this situation because this is the element that drives the real estate market.

In a statement from ABS, they said that though the home lending has gone down but the number of people who are refinancing all-time high right now. According to the report, the refinancing has increased by 29% in the April-May period and the rate of increment is 63.10% on year to year basis.

As per a research group from RateCity, the number refinancers have increased because all the home-owners minimized their expenses to save money as they thought it would get them in a stable financial condition.

It is being expected that there may be a slight rise in lending in the next few months but the situation of the market is far behind the recovery point.

According to Mr. Morrison, the housing market in Australia is resilient. And when most of the people were drawing money from their superannuation balance, they were doing so to use that money in their mortgages.

Meanwhile, the Australian banks have allowed their customers to defer their debt payments which is another great news. Such decisions will be more helpful in the coming years as compares to the time right now.

Mortgage holders get a moment of relief with a cut in the interest rates from the banks

At this moment when most people are worried about earning enough money to maintain their daily lives. So, you can think about the stress of the mortgage holders. Due to scarcity the cash, all such people were unable to complete their repayment for at least 6 months. But good news came from the banks. As the banks have cut the interest rates for the mortgage holders, all such holders can save hundreds of dollars a month. Some people who are worried as some of these schemes are about to end by September but there is no need to worry at all because numerous schemesare on way to help all those people.

Three of the biggest banks of Australia (Westpac, ANZ, and Commonwealth) are allowing most of the homeowners to an interest-only loan for the year 2020. For those who already had an interest-only loan, these banks will extend the time period for such loans.

Banks will now make it easier for all those who want to switch to the interest-only payment methods. The executives from those banks are saying that they working to make this process assessable to all such people.

Here is an example to show you the effects of this scheme, if you have a home loan worth $400,000 for 30 years, with the help of this interest-only payment method, you can very easily save up to $476 every month for a year.

In this mode of loan repayment, the owner will be required to pay only the interest, not the principal amount. And you will not get into any trouble due to paying less amount of money.

For all those who are self-employed and had a home loan, retaining their homes was not an easy task amidst this pandemic. But this step from the banks has made it possible for them.

Some of the finance experts have a different viewpoint regarding this situation. They are saying that the homeowners might have to pay an extra amount in the whole lifetime of the loan because the interest-only loan repayment method will not last long.

10,000 more places now available for the first home buyers under the First Home Loan Deposit Scheme

The first step under this scheme was taken on January 1, 2020, when the Federal government provided enough space for 10,000 homes. Now 10,000 more spots have been made available for the first home buyers in the fiscal year 2020-21. Under this scheme, the buyers will get the benefit of getting the home on minimum deposits.

This scheme is called the First Home Buyer Deposit Scheme. Under it the first-time buyers can get a new home by paying only 5% of the total amount. And the government of Australia has become a guarantor for the other 15%  of the total money. But one thing that you should keep in mind is that you have to pay the remaining 15% in the future. The Government is just helping you to borrow 95% of the property value from the lender.

This step from the Federal Government is a nice one for the people of Australia but a recent survey has revealed that 8 out of 10 people in Australia are not clear about this scheme and they don’t even know whether they are eligible for this scheme or not. With an overflow of such schemes in the market, the first-time buyers of Australia re suffering from information overload.

The interest rates are at lowest, property prices are also down, and the government is launching new schemes frequently, with all these features combined there are surplus opportunities for first-time buyers to get home. Though 85% of the people who can be eligible of this scheme are not even aware of it.

Buying a new home is the biggest opportunity for the people of Australia and it can be better for those people if we provide them enough information about this situation.

It has now become very easy for the people of Australia to get home and the situation of the Australian market can get better if those people increase their savings. If people are confused about what is better for them and the people of Australia, this would act as an obstacle in taking the Australian economy back on track quickly.

Prices involved in buying property under this scheme:

To be eligible for this scheme, the property that you are buying should fall under this price segment:

State/TerritoryCapital City/Regional CentreRest of State


Josh Frydenberg is about to introduce tax cuts

Josh Frydenberg has made it very clear that it is high time to introduce income tax cuts. This decision has been made by seeing the state of the Australian economy in the worst position since the time of World war 3.

The GDP of Australia has fallen by 7 percent for the quarter of June. This has become a matter of major concern for the department of tax return Melbourne. And this has happened due to the lockdown imposed on Australia because of COVID-19.

It is being expected that on October 6, Josh Frydenberg will introduce the budget and the plans about the upcoming versions of JobMaker will be introduced. Providing such information is very crucial as most of the works related to tax are done online by the department for online tax return Melbourne.

When a journalist asked Mr. Frydenberg about whether they are going to cut down the personal tax, he said, “We are on it as this issue has been under our consideration for a long time. Some modifications were made after the last election. Total changes in this field are not apparent as it will take place in three stages. If we somehow manage to put more money in the hands of people, they will spend more of it and eventually more jobs would be created.”

As you know the role of opposition in any working democracy, you can’t know about the whole scenario without listening to both sides. The person concerned with the treasury in the opposition had different viewpoints regarding Mr. Frydenberg. He said that Frydenberg is lacking on vision in all these steps. “Fridenberg started telling about the state of the Australian economy and then suddenly changed the topic to cutting the taxes in particular. It clearly shows that he had no more things to discuss the vision to get this economy in a better state. It’s definitely not the kind of leadership that we want for our economy, especially in this situation. More profound vision is needed in a time when the people of this country find it hard to pay the individual tax return.”

Based on the present situation, tax incentives in the field of infrastructure is very necessary so that business investments would be enhanced.

The situation of the economy will start changing once the effect of the virus reduces and the restrictions are lifted.

But it is very necessary to introduce a roadmap for the businessmen of this country because businessmen will start hiring more and more employees only after making sure that a good route has been decided for the recovery of the economy. Extra people with proper tax training will be needed to make more and more people aware of the financial aids that the government is providing for business owners. This will ultimately lead to enhanced growth of the business.


In this vast age of the internet, there are various sources and people get confused about where to go for authentic information. But there is no need to worry when you have reached here. Accounts NextGen brings to you the most relevant information to make you aware of the situation around you.

Here is what the sole traders need to know about JobKeeper 2.0

It’s been a while since the introduction of the government scheme called JobKeeper to keep the working-class people of Australia employed. But recently some modifications were introduced in this scheme to make it more convenient and accessible for the people who need it the most. In any moment like this, the sole traders are in a state of panic as they don’t know where to find the most relevant and authentic information about this refreshed scheme. As the people are already aware of the strict rules of the department for tax return Melbourne, they need to be updated about the latest information to avoid any trouble. You don’t have to worry much about it as we bring to you the most relevant information about it in this blog.

These changes will come into effect from September 28, 2020, in order to make this scheme more suitable for the sole traders. Later sections of this blog will provide you all the essential information about the changes made if you are a sole trader.

The following updates have been made in JobKeeper 2.0:

  1. Who is eligible for JobKeeper 2.0?
  • You have to keep in mind that only those persons are referred as sole traders who run the business not those who are working in that businessman.
  • As of the regulations mentioned in the new scheme, from 28 September 2020, any business that has seen a drop in their turnover is eligible for this as well as all the future versions of this scheme.
  • In case, you meet all the criteria except for a few, then there is no need to worry. Because there is a way that enables the Commissioner to exercise his power of discretion. In that case, you may get some additional time to gather all the other documents for eligibility. You should appeal to the commissioner for this opportunity.
  • Only those businesses will be eligible for this scheme who meet the eligibility criteria described in the new scheme.
  • In case you have any difficulty in any of these processes, the department for online tax return Melbourne is always there to help you.
  1. What can one do if he/she is not available on the specified date for qualification due to sickness or injury?
  • If you have missed the specified date for qualification, there are some special arrangements for you. Go to the page of the Coronavirus Economic Response Package. On this page, you should read the Sole Trader or Small Partnership with Sickness, Injury or leave.
  1. How much money will I get from JobKeeper 2.0?
  • There are different tiers that have been made under this program. How much money you are going to get from this scheme depends on the tier for which you have qualified. As the situation has become so harsh for business owners that they doubt whether they will be able to gather enough money enough for individual tax return, they are constantly asking about the amount of money they are going to get from this scheme. For more information, you should go to the JobKeeper payments section on the official website of ATO.
  • Broadly speaking, if you are a sole trader and you have worked for less than 20 hours a week in the last four weeks before 1 March 2020, you will qualify for the lower tier of JobKeeper. And, in case you have worked for more than 20 hours a week before 1 March 2020, you now qualify for the higher tier of payment of the JobKeeper scheme.
  • Take a look at the payments plan for the higher and lower tier of JobKeeper:

Lower tier:

  • $650/fortnight from 4 January 2021 to 28 March 2021.
  • $750/fortnight from 28 September 2020 to 3 January 2021.
  • $1500/fortnight until 27 September 2020.

Higher tier:

  • $1000/fortnight from 4 January to 28 March 2021
  • $1200/fortnight from 28 September 2020 to 3 January 2021
  • $1500/fortnight from until 27 September 2020.
  • There are some discretions over the eligibility hours for this scheme. These discretions are valid for those who have either volunteered in the bushfires or they were unable to work because of the restrictions put due to COVID-19.
  1. What about the new employees arriving in your business:
  • No any employee is eligible for this scheme if he has joined your business after 1 July 2020.
  1. Guidelines about the Advance payment of JobKeeper amount:
  • There have been several appeals from the sole traders about the cash flow demands of this scheme. The government reimburses the money in arrears even in the new system.
  1. What can one do if he is seeing a decline in the turnover after March 1?
  • There may be some instances where someone’s business had started declining after March 1, 2020. So, in the new scheme, a way has been designed that enables them to enroll for JobKeeper 2.0.

The Australian government is trying its best to make the business owners capable of coping with this situation. They are introducing new schemes. Such a situation has challenged the people working under the governmental department. That is why the government is always looking for officers who are recruited after giving them the best tax training. That enables them to work under any situation.


In any matter associated with economy and tax, Accounts NextGen is always there to provide you authentic information about the situation going.

Australian Cyber Security Centre alerts Aussies over myGov tax time scam

In a time when the tax time scams are on the rise in Australia, the Australian Cyber Security Centre has alerted the Australian citizens regarding scams associated with myGov.

The Australian Cyber Security Centre has taken this decision because a report from ATO mentioned that the number of SMS and email scams related to myGov. Some messages are generated by the official department for tax return Melbourne. And the scammers make their messages completely look like the official messages from the government.

For those who are unaware of this scam should know about it in the first place. At first, you will receive an email from an email address that seems familiar to that of ATO’s email address. And that mail will request the recipient to verify their details. Most of the people take this message as coming for the purpose of online tax return Melbourne.

Once the recipient has clicked on that email address, he will be redirected to a fraudulent website and there the personal details will be asked to fill up his personal details for the purpose of verification. In some times, people are usually in a hurry to complete the procedure of Individual tax return, they don’t care much about the appearance of the fake verification mail. So, the scammers get a chance to cheat the people with such messages.

As per the warning of the ACSC (Australian Cyber Security Centre), these fake emails look much like the tax time notifications generated by ATO or the myGov.

ACSC has also said,” The cybercriminals or scammers have developed a fake conversation thread that appears like the original texts from ATO or myGov. This is the reason why most of the people take these messages as the original messages from the government.”

As a responsible user of the internet, you should not click on such links and you should avoid providing your personal information at places like this. As the common people don’t have any tax training like the professionals in this area, they are cheated very easily. This can be easily avoided by taking the basic precautionary measures of using the internet.

In all such matters, Accounts NextGen is always there to provide the most relevant information about the ongoing situation around you.

Tax office to punish people engaged in fraudulent activities to save tax

In a recent press release, the taxation office of Australia said that it will punish the people doing super withdrawals to minimize the payable tax.

The taxation office said that there is a certain loophole that enables people to avoid the payment of personal income taxes. And the office is about to punish all such people who give false information to get benefits from this scheme.

As per the statement of ATO, the people of Australia are withdrawing money from their account using financial hardship measure tax-free and then top up their super account through salary sacrifice at a rate of 15 percent.

With the help of this scheme, $10,000 is free of tax for a person having a salary of $100,000 but if he sacrifices $10,000 into his super account, now only 15% tax is being imposed on this $10,000 of the account holder but the right amount of tax should be 37%.

The taxation office has been noticing the people who are managing their wages in such a way that can make them eligible for this scheme. This scheme called Super was introduced by the Federal Government to help the Australians who have lost their jobs or who are getting low wages.

ATO has said the following about this situation, “In earlier days of COVID-19, we saw some cases where people were doing such things to get benefits of this scheme which they did not deserve. In certain cases, we prevented them from applying and did not release the super money.”

ATO can easily fine all those who claim the early access of superannuation payments by manipulating information. This fine could reach up to $12,600.

Sally Tindall (the director of RateCity research) said it is completely certain that ATO will punish all those engaged in such activities. She also said “This particular initiative was taken to help the ones who needed this money the most. We intended to help those who can’t pay their bills or get meals, and the ATO is completely determined to find those who want to exploit this scheme.”

Karen Foat (Assistant Commissioner) has the same viewpoint about the people who are engaged in this type of fraud activity. When asked about this situation, she said the following:

“There is no need to rejoice after seeing that the graph for work from home like jobs is going up because there are a lot of things for which is graph has gone down. Industries like tours and travels and many such others have suffered very big losses. And what we are seeing day by day is that the activities like it to cheat the system is increasing day by day.

There is always a way to work out the simple mistakes that are unintentional but for those who are doing it on a purpose is very bad.”

The Australian Taxation Office said that all such people who are engaged in such activities will have to repay the tax and there is an additional penalty up to 75% of the money that they have not paid. People who have manipulated their documents to be eligible for this scheme will face criminal persecution.

Bernie Dean (chief executive of Industry Super Australia) said “Those who are manipulating their information for getting this scheme are actually making it harder for the ones who are in desperate need of this scheme.”

ISA has also welcomed this decision by the ATO and they said that all those will be punished who are misusing this scheme.

ATO doesn’t consider the JobKeeper payments as a part of aggregated turnover

JobKeeper payments have been considered as assessable income. But there are certain concerns regarding the status of JobKeeper payments as whether they fall under ordinary income or statutory income.

For those who don’t know about it, under this scheme, the business which has been affected the most due to the outbreak of Corona COVID-19 will get money from the government (in the form of subsidy). This assistance is being given to all such businesses so that the employees of all such businesses will get the wages.

As per s328-120, if the JobKeeper payments would become a part of the aggregated turnover, it would decide whether some entity is eligible for different concessions and other measures, instant asset write-offs, base rate entity tax rate, and the refundable R&D tax offset.

Now ATO has made it very clear that the JobKeeper payments are ordinary income but are not derived in the ordinary course of business. So, they are not included in aggregated turnover.

There were certain confusions about whether the JobKeeper payments fall under the category of ordinary income or not in order to calculate the aggregated turnover as said by Tracey Dunn. When asked about this situation, she said the following, “After including the JobKeeper payments in aggregates turnover, there would be some major consequences. Things like CGT concessions of small businesses, the income tax concessions of small businesses, other R&D involvements can push many businesses to threshold after this decision.”

Here are some changes that have taken place in this scheme:

  1. The JobKeeper scheme has been extended until March 28, 2021.
  2. A detailed test of the turnover of the applicant’s firm will determine his eligibility.

Some of the factors that determine the eligibility for this scheme include:

  1. For the businesses having a turnover of at least $1 billion or more and the latest turnover has been reduced by no less than 50%.
  2. The businesses which have turnover less than $1 billion then their turnover of this period should be reduced by 30% or more.

To get the benefits of this scheme, the businesses should apply to the concerned department of the government along with the documents showing a downfall in the turnover. They also have to show the total number of employees working in their firm. But the name of the employees should be mentioned in the book of that business from March and that employee must be active in the same business at present.

It was known to the RSM and they asked about it to the experts. “The ATO has responded very quickly and they modified this information. So, it is clear that they consider JobKeeper payments as an ordinary one and assessable to the employer. But it can’t be included while calculating the aggregated turnover.”

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