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Discuss about the Business Finance for Stamp Duty Calculator.
The changes in property price can be identified from the above figure, which helps in understanding the level of expenses that will be incurred by the client to acquire the Austrian dream. The property price has a relatively grown who are the historical period at the of 1.88%, which is derived from the change in prices of dwelling in Sydney. Therefore, it could be estimated that within the period of 20 years the housing price in Sydney would eventually increase from $1.02 million to $4.51 million. this relatively indicates the rising prices in property, which is estimated to incur in future. The data is directly derived from ABS website containing the prices of established house transfers in Sydney. This relatively helps in understanding the level of Expenses it needs to be conducted by the client to acquire the house in Australia.
|
Time |
Income |
Yearly Income |
Four Year Avg |
Income Growth |
|
1994–95 |
$ 642 |
$ 33,384 |
||
|
1995–96 |
$ 626 |
$ 32,552 |
||
|
1996–97 |
$ 648 |
$ 33,696 |
||
|
1997–98 |
$ 664 |
$ 34,528 |
$ 33,540 |
|
|
1999–2000 |
$ 692 |
$ 35,984 |
$ 34,190 |
1.9% |
|
2000–01 |
$ 709 |
$ 36,868 |
$ 35,269 |
3.2% |
|
2002–03 |
$ 726 |
$ 37,752 |
$ 36,283 |
2.9% |
|
2003–04(a) |
$ 806 |
$ 41,912 |
$ 38,129 |
5.1% |
|
2005–06(a) |
$ 870 |
$ 45,240 |
$ 40,443 |
6.1% |
|
2007–08(a) |
$ 994 |
$ 51,688 |
$ 44,148 |
9.2% |
|
2009–10(a) |
$ 981 |
$ 51,012 |
$ 47,463 |
7.5% |
|
2011–12(a) |
$ 1,015 |
$ 52,780 |
$ 50,180 |
5.7% |
|
2013–14(a) |
$ 1,046 |
$ 54,392 |
$ 52,468 |
4.6% |
|
2015–16(a) |
$ 1,070 |
$ 55,640 |
$ 53,456 |
1.9% |
|
Average Rate |
4.8% |
The growth in income of citizens in Sydney is a relatively depicted in the above table, which is used for calculating the income growth rate in the City. This calculation relatively uses for your average of the changing income to determine the growth rate in overall earnings of salaried citizens. The calculation relatively indicates that or average growth rate of 4.8% in income is a relatively detected, which will increase the client’s income in future 10 years. The graph relatively represents the overall income growth of the client in 10-year time, which helps in understanding the level of saving that she would make to purchase the house (Abs.gov.au, 2018). Hence, from the valuation it could be identified that the income growth management of the client will never literally increase from $ 80,000 per year to $ 127,805 per year in 10 years’ time.
|
Particulars |
Monthly |
Yearly |
|
Annual Salary |
$ 6,666.67 |
$ 80,000.00 |
|
Yearly expense |
||
|
Amenities |
$ 1,500.00 |
$ 18,000.00 |
|
Rent |
$ 850.00 |
$ 10,200.00 |
|
Expense of living |
$ 2,350.00 |
$ 28,200.00 |
|
Tax |
$ 17,547.00 |
|
|
Savings |
$ 2,854.42 |
$ 34,253.00 |
|
Particulars |
Value |
|
Interest rate |
3.52% |
|
Years |
30 |
|
Max LVR |
80% |
|
Price of the property |
$ 420,000 |
|
Borrowed Amount |
$ 335,747 |
|
Deposit for loan |
$ 84,253 |
The total yearly savings is available cli protected at the levels of $ 34,253, After deducting all the relevant expenses and Taxes. Moreover, the total savings of around $ 84,253 is mainly detected for the client, which could be helpful in identifying the property value that could be afforded at the current saving level (Westpac.com.au, 2018). With the interest rate of 3.52% and the Max LVR of 80% for 30 years the client will be allowed to purchase a property of $ 420,000.
|
Without Insurance Premium |
|
|
Particulars |
Value |
|
Property |
$ 420,000 |
|
Total Stamp Duty value |
$ 278 |
|
Total cost |
$ 420,278 |
|
Deposit for loan |
$ 84,000 |
|
Savings |
$ 84,253 |
|
Extra amount |
$ 253 |
|
With Insurance Premium |
|
|
Particulars |
Value |
|
Property |
$800,000 |
|
Total Stamp Duty value |
$18,840 |
|
Current savings |
$84,253 |
|
After payment savings |
$65,413 |
|
Insurance premium |
$31,490 |
|
Total Bank deposit for loan |
$33,923 |
|
LVR |
96% |
Adequate calculations are relatively conducted for the client to determine whether she could obtain the loan with or without insurance premium. This relatively indicates the ability of the client to acquire a high value property or low value property management. The loan acquired without any kind of insurance premium would relatively force the borrower to pay 20% of the overall property amount . However, using the insurance premium would allow the borrower to accumulate high value property, where the LVR percentage could increase as high as 96%. Both the calculations are relatively depicted in the above tables where without the insurance premium she could only buy a property with a value of $ 420,000 and with the insurance premium the property value will increase to $ 800,000.
|
Year |
Property price |
Savings Target |
20% upfront |
Stamp duty |
Difference |
|
0 |
$ 1,020,000 |
$ 84,253 |
$ 204,000 |
$ 34,420 |
$ (154,167) |
|
1 |
$ 1,068,756 |
$ 120,541 |
$ 213,751 |
$ 36,543 |
$ (129,753) |
|
2 |
$ 1,151,263 |
$ 158,977 |
$ 230,253 |
$ 40,136 |
$ (111,412) |
|
3 |
$ 1,240,138 |
$ 199,451 |
$ 248,028 |
$ 44,007 |
$ (92,584) |
|
4 |
$ 1,335,874 |
$ 242,118 |
$ 267,175 |
$ 48,176 |
$ (73,233) |
|
5 |
$ 1,439,002 |
$ 287,100 |
$ 287,800 |
$ 52,667 |
$ (53,368) |
|
6 |
$ 1,550,090 |
$ 334,525 |
$ 310,018 |
$ 57,505 |
$ (32,998) |
|
7 |
$ 1,669,754 |
$ 384,527 |
$ 333,951 |
$ 62,716 |
$ (12,140) |
|
8 |
$ 1,798,656 |
$ 437,248 |
$ 359,731 |
$ 68,330 |
$ 9,187 |
|
9 |
$ 1,937,509 |
$ 492,836 |
$ 387,502 |
$ 74,377 |
$ 30,957 |
|
10 |
$ 2,087,082 |
$ 551,446 |
$ 417,416 |
$ 80,890 |
$ 53,140 |
|
11 |
$ 2,248,201 |
$ 613,244 |
$ 449,640 |
$ 87,907 |
$ 75,697 |
|
12 |
$ 2,421,758 |
$ 678,400 |
$ 484,352 |
$ 95,465 |
$ 98,583 |
|
13 |
$ 2,608,713 |
$ 747,095 |
$ 521,743 |
$ 103,607 |
$ 121,745 |
|
14 |
$ 2,810,101 |
$ 819,518 |
$ 562,020 |
$ 112,377 |
$ 145,121 |
|
15 |
$ 3,027,036 |
$ 895,870 |
$ 605,407 |
$ 121,824 |
$ 168,638 |
|
Year |
Property price |
Savings Target |
5% upfront |
Insurance premium |
Stamp duty |
Amount |
|
0 |
$ 1,020,000 |
$ 84,253 |
$ 51,000 |
$ 44,446 |
$ 34,420 |
$ (45,613) |
|
1 |
$ 1,068,756 |
$ 120,541 |
$ 53,438 |
$ 46,571 |
$ 36,543 |
$ (16,011) |
|
2 |
$ 1,151,263 |
$ 158,977 |
$ 57,563 |
$ 50,166 |
$ 40,136 |
$ 11,111 |
|
3 |
$ 1,240,138 |
$ 199,451 |
$ 62,007 |
$ 54,038 |
$ 44,007 |
$ 39,399 |
|
4 |
$ 1,335,874 |
$ 242,118 |
$ 66,794 |
$ 58,210 |
$ 48,176 |
$ 68,938 |
|
5 |
$ 1,439,002 |
$ 287,100 |
$ 71,950 |
$ 62,704 |
$ 52,667 |
$ 99,779 |
|
6 |
$ 1,550,090 |
$ 334,525 |
$ 77,504 |
$ 67,544 |
$ 57,505 |
$ 131,971 |
|
7 |
$ 1,669,754 |
$ 384,527 |
$ 83,488 |
$ 72,759 |
$ 62,716 |
$ 165,564 |
The table relatively represents the overall income and expenses that is conducted by the Client, which would eventually help in understanding the level of income that could support the property purchase. from the evaluation it could be identified that with the upfront payment of 20% the overall property will be bought within 8 years in future. However, the use of upfront payment of 5% would eventually allow the client to purchase property within 4 years. hence it could be understood that with the 5% upfront payment the client could effectively achieve the Austrian dream much faster (Stampduty.calculatorsaustralia.com.au, 2014).
|
Year |
Interest rate |
Mortgage Payment |
Saved |
Savings |
|
5 |
3.52% |
$68,555 |
$127,829 |
$59,274 |
|
6 |
3.52% |
$68,555 |
$118,166 |
$49,611 |
|
7 |
3.52% |
$68,555 |
$111,306 |
$42,751 |
|
8 |
7.00% |
$101,319 |
$107,394 |
$6,076 |
|
Property value |
$ 1,335,874 |
|||
|
Loan amount |
$ 1,269,081 |
|||
|
Months |
360 Months |
The impact of interest rate change from 3.52% to 7% after the purchase of property is relatively defected in the above table, where the changes in interest payment would effectively be supported by the client which we can see in year 8. Therefore, it could be assumed that the client could effectively manage the increment in interest rates from the savings that is conducted throughout the years (Domain.com.au, 2018). Hence, there will be no impact on the interest payment capability of the client if interest rates are increased in future to 7 percent.
The overall calculations conducted in the financial plan relatively indicate all the measures that might incur in future and might allow the client to conduct the property purchase. However, changes in circumstances could lead to a drastic turn where the financial plan would not help the client in achieving her Austrian dream. Therefore, the financial plan can be identified as unviable if the client is not able to accumulate the required level of income from her job. this would result in problematic situation for the client which will directly impact our ability to pay the mortgage. Moreover, the incremental interest rates in Australia more than 8% will directly make the client defaulter, due to the low availability of savings on her part. Hence, under these two circumstances the financial plan will not help the client achiever Austrian dream.
References:
Abs.gov.au. (2018). Ato.gov.au. Retrieved 26 May 2018, from https://www.ato.gov.au/calculators-and-tools/simple-tax-calculator/
Domain.com.au. (2018). Domain.com.au. Retrieved 26 May 2018, from https://www.domain.com.au/rent/sydney-nsw-2000/
Stampduty.calculatorsaustralia.com.au. (2014). Stamp Duty Calculator. Retrieved 26 May 2018, from https://stampduty.calculatorsaustralia.com.au/
Westpac.com.au. (2018). Westpac.com.au. Retrieved 26 May 2018, from https://www.westpac.com.au/personal-banking/home-loans/calculator/stamp-duty-calculator/
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