Change of Income/Expenses

I am currently working in a higher level position that pays an extra $30000 annually. This has put me in the much higher tax bracket and I am only clearing about $220 extra a week.

The question is what would be the impact of on borrowing if I went back to my original position which is $30000 less. The salary is $106000.

I am also working remotely and I have just been told my property which is a unique property with 3 liveable dwellings (Historical) is in a high demand area in the country. The possible rental income is $1450 a week as the school in our area is desperate for housing.

The property would be valued anywhere between 600 and 800 thousand. We currently owe $240000 and want to buy another property closer to the coast selling in the mid 600s.

Moving to this new property would mean I need to drop my salary by $30000.

 

Assuming your current income is 136,000, the tax on the last 30k would be about 10k.

Your 220 extra a week after tax looks wrong. If you make an extra 30k and only clear 220 extra a week, that implies a tax rate of 62%.

 

using the 6 x rule it would be 6 x $30,000 or $180,000 less borrowings. very rough

Rental yield is generally capped at around 6% for servicing

 

The more income you have the more you can borrow

Here is a handy calculator to help you with gross to net
pay calculator

 

Agree should be $100 pw higher ($305 pw net) EXCEPT if there is a HELP debt or second job or other factor leading to higher tax withholding

eg $30,000 x 47% (assuming highest tax rate) = $14100. Net pay is $30000-$14100 = $15900. /52 = $305 pw. If marginla tax rate is lower then higher net pay should also occur. If the employer is overtaxing this implies a higher tax refund could occur.

This tax issue doesnt in itself affect borrowing. Lender will consider gross amount and be satisfied sufficient tax is correct unless it looks wierd and they ask why.