A Chattel Mortgage is an attractive financial option for businesses that use the "cash" method of accounting for the Goods and Services Tax (GST). Under the cash method, the GST component of the acquisition price of the equipment can be claimed back on the entity's next Business Activity Statement, rather than claiming the GST over the term of the finance contract.
Chattel Mortgage features:
- Fixed interest rate for the contract.
- Balloon payment at the end of the contract is available to reduce monthly repayments if required.
- No GST payable on the loan or repayments.
- The loan can be repaid at any time during the term of the agreement.
- The interest component of the payments and depreciation on the vehicle may be tax-deductible.
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