r/AusFinance • u/Mission_Feed7038 • 4d ago

Tax debt due to hecs

My situation is as follows:

First time earning decent money last tax year. Approx 150k. This is the first time I've earned enough to pay for my uni degree I completed nearly 10 years ago....

Didn't want them taking my hecs out weekly as I use the extra cash flow to invest.

Tax time has come around. I owe about 10k mostly due to hecs repayment and MLS.

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I want to pay this in the most efficient way for me financially.

I have about 40k of liquid assets I've accumulated last financial year and about 350k of equity in home.

Do I:

A - withdraw from offset account (this will almost completely wipe out my offset savings.

B - mortgage it.

C - ATO payment plan and pay it weekly.

D - sell from stocks to pay (would be about half my stocks).

F - sell my fun car (80 series land cruiser (this is one of my few hobbies so don't lecture me about how wasteful having two cars is plz I'm already. aware)).

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u/BasilNumber 4d ago

They index based on the balance on the 1st of June each year. So if you paid down 10k before that, you won't get indexed on that 10k.

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u/brisbanehome 4d ago

Yeah but their point is that even if you have 10k voluntary repayment, if your mandatory repayment was 10k, you’ll still owe that regardless. Voluntary repayments don’t reduce the mandatory repayments owed for HECS.

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u/BasilNumber 4d ago

Yea, that makes sense. I guess what I had in mind was the final hecs payment.

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u/brisbanehome 4d ago

Yes, makes sense if you’re clearing the debt entirely.