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What should be entered as a Family home
- A property should be entered as a family home if it is an individual(s) principal place of residence (usually the one in which they are currently living). It is important to distinguish the family home from investment properties because it has a different tax status for associated mortgage repayments and for capital gains, if the property is sold. It is also important to identify the family home when estimating the Age Pension.
- Family homes can be owned by an individual or a couple, but note that for tax purposes an individual can only own one family home at a time and Pathfinder will not solve if an individual owns multiple family homes at a single time (although it is okay if they sell a home and purchase a new one in the same year).
- Do not enter under Family home:
- A property that used to be your home, but which you are now renting out (or vice versa) - You should enter this as an Investment Property and submit the case to the Optimo Financial SDS or see How to convert a family home to an investment property (or vice versa) - a workaround.
How to add a Family home
- To add an existing Family Home, go to the Current situation step (top menu), then the Assets & Loans sub-step. And then click the +Add Assets button (on the left menu).
- If you have a mortgage against the family home, it should be added as a Secured loan. If the loan is secured by the family home, but is funding another asset, the loan should be added under the asset that is being funded. For more see How to enter a loan that is secured by one asset and financing another asset (e.g. home equity loan).
- To add a new family home (i.e. a family home that you would like to buy in the future), go to the Cash flows & Goals step (on the top menu), then the Review Assets & Loans sub-step. Then click the Add new Assets & Loans button (at the end of the page) and choose the Buy a new family home option.
Modelling options for a Family home
|Set a value for property growth||To set a value for property growth, on the 'Property value $' field, use the series builder field to edit the 'Index by' field. For more see How to use the series builder.|
|Pay off the mortgage early||See the Secured loan help page.|
|Sell an existing family home and buy a new one|
|Stop renting and buy a new family home|
|Sell an existing family home and start renting|
|Additional data entry options|
Results for Family Home
See Family Home results.
Other items related to Family home:
- Secured loan
- Investment Property
- Expense (for more information about choosing the 'Rental income' type)
Strategy Development Service (SDS) options
If the case includes complex analysis that you are not able to do in Pathfinder yourself, it may need to be submitted to the Optimo Financial SDS. Complexities include, but are not limited to:
- Converting a your current family home to an investment property or vice versa (i.e. you currently live in the property and would like to rent it out). Before submitting the case to the SDS, you can try the workaround described in How to convert a family home to an investment property (or vice versa) - a workaround.
- Borrowing against the property to purchase shares - You can try this by following the instructions on How to enter a loan that is secured by one asset and financing another asset (e.g. home equity loan), however there may not be enough options to control the borrowing as much as you like, so use with caution.
- Borrowing against the property for an expense (e.g. home renovation) - This is controlled with the Used equity as line of credit field on Secured loans, you can try using this field before submitting the case to the SDS, but the websolve may not allow you to control the borrowing as much as you require.
- Purchasing or selling a home on a date other than 1st January of the selected financial year. By default, property transactions occur mid-financial year (that is, 1st January). This means that when a home is bought, savings made in the first half of the financial year may contribute to the deposit and mortgage repayments to be made in the second half of the financial year. And when a home is sold, mortgage repayments are assumed to be made in the first half of the financial year, with the proceeds of the sale available in the second half of the financial year