A Novated Lease is a great way for employees to get into the car they want while gaining tax advantages through salary packaging and you don’t need to be using the car for business use to get the benefits of a Novated Lease. A Novated Lease is an agreement between a lender, the employer and the employee. The employee leases the vehicle from the finance company under their own name, and the employer agrees to make all payments due under the agreement.

Under a Car Lease or ‘Asset Lease’ the financier is seen to purchase the vehicle on behalf of the customer, who then leases the vehicle back from the financier and pays the agreed monthly lease rental for the term of the lease. At the end of the lease the customer can either pay a residual value, which is the final instalment on the lease and take ownership of the car, trade it in or re-finance the residual and continue the lease the vehicle.

A Chattel Mortgage is an ideal way for sole traders, partnerships, business customers who are registered for GST to maximise the taxation benefits gained from financing a new or used vehicle and other plant and equipment. Under a Chattel Mortgage GST does not apply to the monthly payments, however if the purchaser is registered for GST the GST component on the purchase price of the item may be recoverable through your BAS.

A Chattel Mortgage is an ideal way for sole traders, partnerships, business customers who are registered for GST to maximise the taxation benefits gained from financing a new or used vehicle and other plant and equipment. Under a Chattel Mortgage GST does not apply to the monthly payments, however if the purchaser is registered for GST the GST component on the purchase price of the item may be recoverable through your BAS.