Getting a Home Loan as a Pro Punter
 

Have any of the full time punters here managed to get a home loan after turning pro? Did the lender treat gambling income as proof of ability to service the loan? Did the lender just want to see evidence of wealth growth? Or was the gambling a big no-no?

Please no speculation or gambling advice, would like to hear from actual experience dealing with lenders.

A can of worms Fred. Let's assume that you have a good credit rating. With a steady job and sufficient income to service the loan, then you can get a loan to 85% of the value of the property. With a gambling income you get lumped into the self employed category and a no-doc loan of a max 65% of the value of the property. No-doc you are riding on your credit rating and not your income. There are many ways to get around these restrictions and this forum is not a place to discuss them.

Fred, you do not have to declare you are a professional punter.
Your credit rating, your last tax assessment notice and three months worth of bank statements should be more than enough.

Set up a sole trader account such as Fred trading as Global Accounting or Internet Marketing or similar.
Transfer money from another bank using another sole trader account on a weekly or monthly basis, so they see regular amounts going in.

If you tell them you are a pro punter it's all over. They'll look at you like you have two heads.
If your balance is high enough and you've a long enough history with the money transfers etc. You may not need a Tax Assessment notice. Make sure you have an ABN. They will check it's legitimate.

It's important you do nothing that could be deemed fraudulent however, you you can name your punting whatever you like legally, that's your business.

Another factor that may add credence to your application is assets other than money.

Thanks for the advice guys.

Beton, where would I find out about the other ways to get around the restrictions?

An issue for me is that I believe it's only a matter of time before the ATO goes after pro gamblers (which I'm not, it's just a full-time hobby for me). If that happens, anyone who operates their gambling like a business will be hit with a tax bill for the last 7 years. Maybe it will never happen but I would never risk it. So that would exclude getting an ABN or setting myself up as a sole trader.

I have other ways of raising finance, but a bank loan is the cheapest. But as you say CP I would hate to apply only to discover that the mere mention of gambling makes me a two-headed monster and destroys my credit rating.

Just as a thought for yourself and anyone else looking at this maybe investing some money in another business to make things more legit in the eyes of the banks.

This would be the path i would choose if i could afford to punt full time.

Agree, it's also nice being able to say that you are a contributing, tax-paying member of society.

Sorry I should have clarified, the ABN will give you more credibility as a sole trader, so set up a business.
There's no way the tax office will come after you as a pro punter anyway.
Can you imagine the GST claims from all losing punters coming in?
Software, computers, adsl lines, foxtel, formguides, petrol, car repairs.
It would be a rort and they know it.

Plus if you work fulltime or part time as well, then you;d pay no tax at all as a losing punter. So the ATO would have to give you back all tax you've paid!!!

A winning punter of course could give net profit after commission, and other deductions, but part of your business could involve overseas travel at your expense including hotel accomodation.

It's a deep deep hole they have no answer to, plus it used and still could be a cash only business ;)

You're only really in trouble if you rent an office and hire staff (apart from your spouse). Many large punters have been asked and the ruling always comes down, not a taxable business.

Fred

Have a long chat with a broker and get it in black and white and grey what you want and what you can and what you can't. Armed with this knowledge you can either utilise this broker or go to broker No 2 and only tell him what he needs to hear.

I changed jobs back in 74 for 4 mths to get a 5% fixed loan. best investment ever.

Thanks Beton, that's a very good idea.

CP you are right that it is utterly ridiculous for the ATO to tax winners they deem to be "business like". Every long-term loser need only produce a spreadsheet where they have balanced their accounts, and voila it's a tax right off. Problem is that they have taxed a few punters already. Say it's a 1% chance of happening to me - well I can handle a 3 month recovery time, but that 1% risk of being taxed is too much for me to stomach.

Who are these punters ? And I suspect you will find they were not "gambling". For example, If you trade out (arb) then you are now trading stock and are not officially gambling.

There is NO chance of person who actually backs horses or sports being ever taxed by the ATO.

ALso if your talking about David Walsh and Zeljko Ranogajec and his club then they were not gambling either. They were being paid to provide liquidity which again is not gambling.

If you trade out of your positions... then yes you should be taxed. If you are just placing a bet on a horse or horses and you can lose the whole amount then the ATO will not chase you.

Good points UB. As far as I know there have been no specific rulings from the ATO on it, and there isn't enough precedence to cover the full gamut of gambling activity so in my opinion it's still a grey area. But everyone has their own take on it. I don't have the links handy, but the in two of the cases I recall they were neither getting rebates nor trading out. Even if you could beat the ATO, the stress, time and expense of being dragged through the courts is another reason to avoid operating in a business-like fashion.

From what i remember reading if you didn't have other interests in racing like breeding, owning or a bookmaker then you would be pretty much ok with being a professional punter.

Simple, get in early Fred, apply for a ruling in writing and you're covered for life.
I know of at least two propunters that applied for a private ruling and have it in writing.
Unless, you have staff, an office or are in bloodstock, you will qualify for the private ruling meaning they cannot query you in future.

Wow, thankyou so much CP, I wasn't aware of the private rulings.

Fred,
as it turns out i am, between races, a finance broker.
regarding all lending its the 3C's - capacity to pay, cash and credit rating.

property purchasers:
re income:
low docs and no-doc loans are just about gone now unless you can supply BAS and/or a letter from your accountant
full doc loans will require payslips, group cert or if you are self employed your last 2 years tax returns - company and individual .

your chosen profession doesn't matter too much - this is what you need to provide whether you a are a school teacher or a lion tamer in a Barnum and Bailey circus.

re assets:
cash required is minimum 5% of the purchase price
20% is better.

credit - no black marks

that's it really

Also forget all this wishful thinking about being taxed by the ATO.
It will never happen to 99.9999% of the population.

Some people generally just like to "frown" about its possibility as a thin disguise for their bragging about being successful etc.

Thanks very much aussie for the expert advice. I ended up speaking to a broker as well and he said exactly what you have said.

The broker told me some other things particular to my situation, and it turns out that I don't need to re-finance my existing loan to get what I need so I am all good, surprisingly! Thank goodness for brokers.

Glad you got sorted out. My broking is over 13 years old. Thanks Aussie

How many people here on the forum actually punt for a living? anyone know roughly?

I'll put my hand up for that Pat. Can't say how many of us there are though.

With regard to the home loan thingy: I went down that road and they just weren't interested in lending money on this type of income. Only went to the banks though. Maybe a broker has access to more liberal cash?

Not sure the reason why you would ask this & normally,
I leave it to others, but as Pat is fairly new & contributes,
Regularly I have since 2006.

Several members from this forum who I converse,
With off air so to speak know anyway.

As for knowing how many on the forum unless everyone here,
Says something it's a guess?

What would be more relevant is how people actually go,
About selecting their horses to back, or lay.

Reckon there would be stacks of them.

As for the home loan question (PASSSSSSS)

Cheers.
Garyf

I asked because I am genuinely interested. I've done it for about a year now and want to know if others do too.

If I were arbing I'd be very interested to know who my competition is as well. From their posts, I get the impression that about 8 or 9 of the current regulars are doing it full-time. And possibly two of them are arbing as well. But that's just a wild guess. I retired from the workforce a bit over 4 years ago myself.

Aussie, I fancied a tree change and wanted to build a house on a block I've got in the countryside. Been to two brokers and they just laugh. Are you sure of your impressions?

A bit more
 

Just to add Aussie, what they said in a nutshell was that if the income wasn't "declared income" then they simply won't consider it.

It's been a while since I have posted here so thought I'd chime in..

I'm still arbing. I started in August 2012 and still going strong. I probably do about 4 hours of scanning per day 7 days a week, mixture of day and night but I find the international races still better.

Last night I did one race then logged off. I made $563 from it and arbed it for about 2 hours straight until it raced. It was Gowran Park, race 2 and it was a quad arb (4, 14, 15, 18) which was perfect as the profits and losses on Betfair offset each other increasing overall profit takings. I still have my trusty bookmakers which I've used for over 12 months with no sign of stopping. I won't be naming them although no doubt many of you would use [some of] them anyway!

I got a new setup a few months ago as my old PC was running slow. This new thing is a beast and does the job very nicely. I also have back up internet in case there's ever a problem. I have a special widescreen laptop too which split screen ability. Once or twice a year i might back and then our internet goes down before being able to lay. In the grand scheme of things it doesn't really make a dent, but it's still annoying.



The main thing i'm trying to do this year is cut down on stupid mistakes. Discipline is definitely the key! The main ones being: backing for place then leaving it too late to lay, then the market suspends. Also, assuming liquidity will come in for the lay (AUS) and getting stuck and trading out for a loss. I would say I lose about $300-$400 a week on average in stupid mistakes so i'm really working on it now. If you multiply that by 48 weeks it's a LOT of lost money.

I've also been using other bigger bookies like Sportsbet for NSW racing which is good. I've spoken to Richard Irvine and a few others and they think other states will bring in similar min bet rules by the end of the year. I doubt it myself but we will see! That would be amazing. On a similar note I haven't noticed any less arbs on NSW races since the new rule. The holy grail for me would be min bets on ALL racing (international mainly), but I can't see that happening either.

Hope all is going well with you guys!

you can get around it a bit but you will need an accountants letter stating your income and you may have to provide bank statements etc.

By an large though if you don't pay tax on it you cant use it to demonstrate your earnings

That's pretty much the clincher for stuffing it up for me Aussie. How I dream of the good old days when just signing a statement that you could afford the finance was all they needed!

The answer is pretty simple to me, you have 2 choices, pay cash or invest in a business, the second option seams a better one and i would have thought the most obvious.

Good work Pat. Hopefully it all continues to improve for you and you don't get any issues with your current bookmakers. I saw your comment on NSW bookies. I assume you are placing your bets via the phone then as most make it hard for you to back online.

yes I've done stacks of them.
they basically finished in about 2008.
1 day ABN and 40% deposit was the requirement
the rate wasn't too bad either.

GFC in the US took care of them.
they had NINJA loans over there for 100% of the value
NO INCOME
NO JOB
NO ASSETS

Funny thing was about 15% of them went bad - which is high - BUT that meant 85% survived for people who would not ordinarily qualify.

so it was good result for society.
cheaper for everyone than housing commission/council flats/the projects.

The bookmakers i currently use on NSW racing dont require phone bets, but i do know some that do like Palmerbet which have become a joke. Theyre as bad as UK bookies.