Chattel Mortgage

How does a Chattel Mortgage work?

A Chattel Mortgage is a type of Car Finance where you take the ownership of the vehicle upon delivery and the finance provider secures the loan by registering a charge over the vehicle.

Benefits of a Chattel Mortgage

  • A Chattel Mortgage may provide tax benefits if the vehicle is used to produce assessable income.
  • GST may be claimed on the purchase price of the vehicle if you are GST registered.
  • 100 per cent Car Finance is available subject to the finance providers lending requirements.
  • Repayments can be tailored to suit your cash flow requirements.
  • Interest rates are fixed so you won't have to worry about rate increases
  • No GST is charged on the monthly repayment or the balloon amount.

Chattel Mortgage "Tax Implications"

  • Where the vehicle is used for business use, the hirer can claim "interest and depreciation". That is interest on the lease payments and depreciation up to the luxury car tax threshold or depreciation limit of $57,123.
  • GST is also claimable on the purchase price of the vehicle in one lump amount.
  • The monthly repayment or balloon amount is not subject to GST.

Other Options

You may also want to consider a Finance Lease or a Commercial Hire Purchase as other Car Finance options.

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