Every year around July we face that same decision… what to do with our tax return.  

That little present we receive from the Australia Tax Office for working hard and diligently paying our ever increasing tax bills each year.  For many this rebate, which can be anywhere from $500 to tens of thousands of dollars, is used on ‘the nicer things in life’ or ‘splurge money’.  A holiday, that new designer handbag or professional golf clubs you have been eyeing off for months… but there are ways you can use this years tax return to make a real difference to your financial future.

With a little forward thinking and planning you can really make your tax return benefit you in the long run, especially in terms of your mortgage and building equity. In return, paving the way for buying more investment properties and increasing your wealth in the future.

“Australians, who simply apply their tax returns to their mortgages, rather than purchasing those unnecessary, but rather fun ‘in the moment items’, will benefit themselves in the future. It’s all about smart investing”, said Hannah Schuhmann, Principal of HS Brisbane Property.

Applying your tax return repayment towards your mortgage could cut your loan time by years and saved you tens of thousands of dollars.

For instance, if you receive a tax return of $2,000, and you put that money straight into you $300,000 mortgage - you already have the opportunity to save around $7,000.  That is just in interest for the duration of the 30-year mortgage.

Continue to do this annually, and over 30 years you could see an approximate saving of $77,000*, consequently slicing your mortgage repayment period by six whole years and getting you closer towards financial freedom! 

It’s really that simple - smart thinking and repetitive tax return repayments on your mortgage can help bring your dreams to reality!   Talk to your accountant today about your options and how you can use this years tax return as a stepping stone to your next investment property.

* Based on current interest rates and a $2000 a year deposit.