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Provisional Tax and Student Loan Payments Due 28/8/2015
Use of Money Interest (UOMI) Rate Change
Changes to the KiwiSaver First Home Deposit Subsidy and Withdrawls
Fixing or Floating Your Mortgage
The first instalment of Provisional Tax and Sudent Loan interim payments are due on 28/8/2015 for taxpayers who have a March balance date.
This due date applies to Provisional Taxpayers who use the Standard or Estimation option to calculate their Provisional Tax payments.
TotalAccounting have recently sent out letters to clients who paid Provisional Tax in the year ending 31/3/2015, and are therefore likely to be due to pay Provisional Tax in the year ending 31/3/2016, and who have not as yet provided their year ending 31/3/2015 financial documentation for preparation of Financial Statements and assessessment of Income Tax liability. Those such clients should receive these is the next few days.
Effective 8 May 2015 the UOMI rates on underpayments and overpayments of tax changed.
The new rates are:
Rates are reviewed regularly to make sure they are aligned with market interest rates.
Effective 1 April 2015, Government has changed the rules around KiwiSaver HomeStart grants and KiwiSaver first home withdrawals.
The key changes are:
For more information see:
FIXING OR FLOATING YOUR MORTGAGE
When borrowers, whether for your use home or whether as a property investor, make this critical financial decision, they normally make one of three choices:
take a floating rate and potentially face higher (or lower) interest costs
take a fixed rate, which may or may not prove better than floating rates during the fixed term
split the mortgage into two loans, with one loan on a floating rate and the other on a fixed rate for a specific term
One of the normal consequences of a fixed rate motgage is that if you break it or if you pay it off earlier you are liable for early repayment penalties.
Even profound economists are unable to consistently predict every event that may significantly influence interest rates. So how do we continually get the lowest possible interest rate on our mortgage? The short answer to that is- we can't.
If we do choose to simply take a long-term low fixed rate, we are exposed to the risk that when our fixed rate expires, we may face a large rate increase, which we may not be able to afford.
Many people opt for a floating rate (when floating rates are low) and sometimes will incur early repayment penalties to break fixed rates so they can enjoy a lower floating rate. Their intention is usually to watch interest rate levels and take a fixed rate if rates start to increase. This reflects a somewhat short-term to a long-term mortgage commitment. If interest rates start to increase, for example, and you take a fixed rate, you may find a few months later that those rates are back down- or worst still, considerably lower than when you decided to take a fixed rate.
Other people split their mortagage between fixed and floating in an effort to minimise a total exposure to the risk of floating and fixed rates both rising.
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