Chattel Mortgage
Chattel mortgages allow sole proprietors, partnerships and companies using the 'cash' method of accounting for the Goods and Services Tax to claim back the GST in the vehicle’s purchase price in the first Business Activity Statement after purchase.
Features of Chattel mortgages are:
- The interest component of loan repayments and vehicle depreciation may be claimed as business tax deductions
- The GST refund in the vehicle’s purchase price may be paid off the loan, thus reducing the amount financed and interest charges
- The repayments remain constant over the term of the loan
- Loan repayments can be direct debited from your nominated bank account
- Loan terms range from 24 to 60 months
- The loan is secured by the vehicle
A negative aspect of a Chattel Mortgage is that there is an ASIC lodgement fee of approx $250. You may not be able to lodge the payment if the borrower is a company which already has a floating charge levied by their bank or other lending institution.