Perpetual product still good value, says Perpetual
The recent Federal Budget changes to interest rate deductibility have shifted Perpetual’s protected investment interest rate higher than the rate of deductibility.
However, Perpetual general manager of structured products Russel Chesler said that the product, Perpetual Protected Investment — Series 3, remains a tax effective investment structure.
“The new legislation means investors with capital protected borrowings will be eligible to claim a tax deduction on interest incurred up to a maximum rate, set according to the Reserve Bank of Australia’s (RBA) Indicator Rate for Standard Housing Loans — 9.45 per cent,” he said.
Previously, the RBA Indicator Rate for Variable Personal Unsecured Loans was used as the benchmark, and this rate is currently sitting at 14.60 per cent.
“Our new product has interest rates ranging from 10.50 to 10.70 per cent, meaning under the new legislation investors can still claim 88 per cent total deductibility,” he said.
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