{"id":1966,"date":"2017-02-21T15:31:21","date_gmt":"2017-02-21T04:31:21","guid":{"rendered":"https:\/\/www.martinco.com.au\/?p=1966"},"modified":"2017-11-28T16:46:59","modified_gmt":"2017-11-28T05:46:59","slug":"homes-are-the-best-investments-for-you-and-your-kids","status":"publish","type":"post","link":"https:\/\/www.martinco.com.au\/homes-are-the-best-investments-for-you-and-your-kids\/","title":{"rendered":"Homes are the best investments for you and your kids"},"content":{"rendered":"

As financial planners, helping our clients manage their family home is one of the most enjoyable things we do.<\/h2>\n

We love family homes. For a start, we love families \u2013 and families live in family homes. What\u2019s more, enjoying your home is the easiest way to enjoy life in general. A happy home \u2013 and a home you are happy with \u2013 is an essential part of a happy life.<\/p>\n

But that is not the only reason we love helping people get the best family home they can afford. Family homes are not just great places to live. History shows that family homes are also cracking investments<\/a>. Over the last 20 years Australian property has averaged<\/a> a return of more than 9.5% a year, including both rents and capital gains. That means that house values doubled every seven or eight years. (Yes, these are average figures across the country and not every market did this well. But all markets did at least quite well over that time period).<\/p>\n

Things are even better when gearing is involved. \u2018Gearing\u2019 is a fancy word for borrowing \u2013 and most people borrow money to buy their family home.<\/a> If you start with 20% equity (and borrow the remaining 80% of the purchase price), and the house doubles in value, then the value of your equity increases to 60% of the increased value of the house.\u00a0 The proportion of debt halves when the value of the property doubles.<\/p>\n

But that is not all. Even better is the fact that the family home does not attract Capital Gains Tax<\/a> (CGT). This means that you do not pay tax when selling a home that has increased in value. This is a central plank of Australia\u2019s taxation system and it is not going to change any time soon.<\/p>\n

Combine this tax treatment with the long-term results that Australia\u2019s housing market has achieved, and you find that most Australians are living in tax-free investment machines. For example, if you are in the 45% tax bracket and you own a $1,000,000 property and it goes up in value by just 5%, or $50,000, that\u2019s the equivalent of earning an extra $92,500 a year in pre-tax salary. This is because you would have to earn $92,500 and pay tax at 45% to be left with $50,000 in cash. What\u2019s more \u2013 you can\u2019t live in cash. That is why houses are usually better places to hold wealth than cash.<\/p>\n

The last 20 years has seen constant growth in the value of Australian homes, with Perth being an exception in the last few years (having grown by more than the national average prior to the tailing off of the mining boom). This has a lot to do with our constantly growing economy (we have not had a recession for 25 years now). In addition, immigration has been a particularly important driver of the national economy. And guess what? People still want to come to live in Australia. That won\u2019t change any time soon.<\/p>\n

The Australian obsession with home ownership is likely to continue. It makes sense to invest wisely in the home. We strongly encourage home ownership strategies, and their close cousin, debt management strategies, whenever we meet with a client. Even if the rate of growth slows (or we get a negative year or two), long term the right housing purchase turns out well. What\u2019s more, this \u2018investment\u2019 gives you a place to live as well.<\/p>\n

(One word of clarification: when we say housing we do not mean high rise apartments. Their economic future is very different to homes and units in small blocks).<\/p>\n

And our advice is not just about homes for clients. We also help with homes for the children of clients and even sometimes the grandchildren of clients. Indeed, it is these adult \u2018kids\u2019 that our clients tend most to worry about. \u201cHow will our kids ever afford their own home<\/a>?\u201d is one of the most common things we are asked. In our blogs and ebooks for this month and next, we will discuss various ways to make buying and holding property as easy as possible. And we will not just focus on your home. We will look at ways to help other people \u2013 typically your kids \u2013 own their homes as well.<\/p>\n

Feel free to contact MartinCo\u00a0now<\/a> and we can talk you through ways that make home ownership much more achievable for you and the people you care about.<\/h3>\n","protected":false},"excerpt":{"rendered":"

As financial planners, helping our clients manage their family home is one of the most enjoyable things we do. We love family homes. For a start, we love families \u2013 and families live in family homes. What\u2019s more, enjoying your home is the easiest way to enjoy life in general. A happy home \u2013 and a home you are happy with \u2013 is an essential part of a happy life. But that is not the only reason we love helping people get the best family home they can afford. Family homes are not just great places to live. History shows…<\/p>\n","protected":false},"author":3,"featured_media":2042,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[110,113,112,115,114,116,111,65,103,107],"yoast_head":"\nHomes are the best investments for you and your kids - MartinCo<\/title>\n<meta name=\"description\" content=\"MartinCo pride ourselves in being friendly, accessible accounting & finance specialists, who help you build your wealth to achieve your goals.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.martinco.com.au\/homes-are-the-best-investments-for-you-and-your-kids\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Homes are the best investments for you and your kids - MartinCo\" \/>\n<meta property=\"og:description\" content=\"MartinCo pride ourselves in being friendly, accessible accounting & finance specialists, who help you build your wealth to achieve your goals.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.martinco.com.au\/homes-are-the-best-investments-for-you-and-your-kids\/\" \/>\n<meta property=\"og:site_name\" content=\"MartinCo\" \/>\n<meta property=\"article:published_time\" content=\"2017-02-21T04:31:21+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2017-11-28T05:46:59+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.martinco.com.au\/wp-content\/uploads\/2017\/02\/MartinCo-News-Homes-are-the-best-investments_1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"910\" \/>\n\t<meta property=\"og:image:height\" content=\"478\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Digital COG\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.martinco.com.au\/#website\",\"url\":\"https:\/\/www.martinco.com.au\/\",\"name\":\"MartinCo\",\"description\":\"Chartered Accountants & Financial Advisers\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.martinco.com.au\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-AU\"},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-AU\",\"@id\":\"https:\/\/www.martinco.com.au\/homes-are-the-best-investments-for-you-and-your-kids\/#primaryimage\",\"url\":\"https:\/\/www.martinco.com.au\/wp-content\/uploads\/2017\/02\/MartinCo-News-Homes-are-the-best-investments_1.jpg\",\"contentUrl\":\"https:\/\/www.martinco.com.au\/wp-content\/uploads\/2017\/02\/MartinCo-News-Homes-are-the-best-investments_1.jpg\",\"width\":910,\"height\":478},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.martinco.com.au\/homes-are-the-best-investments-for-you-and-your-kids\/#webpage\",\"url\":\"https:\/\/www.martinco.com.au\/homes-are-the-best-investments-for-you-and-your-kids\/\",\"name\":\"Homes are the best investments for you and your kids - 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