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AFM Mortgage & Finance
Which option is most suitable?
Finance for individuals: If your employer allows salary packaging, a Novated Lease could be a great option.
A Novated Lease is a 3-way agreement between you, your employer and the finance company. Payments are generally made out of your pre-tax income and exclude GST, which can provide you with some great savings.
This type of agreement will attract some Fringe Benefits Tax (FBT), which most employers pass on to the employee. However, the employee usually comes out well in front.
Finance for business: If you are using "accrual accounting", you have the option to use a Hire Purchase (also known as Commercial Hire Purchase or CHP), which will allow you to claim the GST portion of the vehicle price back as input credits.
If you are registered for GST, you can take advantage of your GST status a number of ways.
You can either use a Chattel Mortgage , which allows you to claim back the GST, or a Finance Lease , which will reduce your loan amount by the amount of GST payable on the vehicle.
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