> For the complete documentation index, see [llms.txt](https://docs.scaleconnect.com.au/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.scaleconnect.com.au/scaleconnect-docs/support/glossary.md). # Glossary Definitions of terms used across ScaleConnect, listed alphabetically. Each entry links to the relevant documentation page where the concept is explained in more detail. *** ### Acquisition Costs The upfront expenses incurred when purchasing a property — stamp duty, legal fees, inspection fees, Lenders Mortgage Insurance (LMI), and other settlement costs. These are entered during the Properties step of the strategy builder. → See [Adding Properties](/scaleconnect-docs/simulator/adding-properties.md). ### Appraisal A formal valuation of a property's current market value, typically conducted by a licensed valuer. In ScaleConnect, property values can be set manually or sourced via PropTrack data during the address search. ### Assumption An ongoing baseline value that runs as a continuous row across the simulation timeline — salary, living expenses, occupancy rate, capital growth. Assumptions define the default state and compound over time. They differ from events, which are one-off changes at a specific point in time. → See [Personal Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/personal-events-1.md) and [Property Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/property-events-1.md). ### Balloon Payment A lump-sum payment due at the end of a loan term, commonly used with car loans. If specified, the simulation accounts for the residual balance due at maturity. → See [Personal Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/personal-events-1.md). ### Base Case The primary strategy created when a client is onboarded. It represents their current financial reality and cannot be deleted. All alternative scenarios (sub-strategies) are cloned from the Base Case. → See [Strategies](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/strategies.md). ### Broker Brain ScaleConnect's AI assistant for brokers. It has full context on your clients, strategies, and portfolio data and answers natural-language questions about your practice. → See [Broker Brain](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/broker-brain.md). ### Capital Gains Tax (CGT) A tax on the profit from selling an asset. In ScaleConnect, CGT is calculated automatically when a Sell event is placed on a property's timeline. The 50% CGT discount applies for assets held longer than 12 months. → See [Property Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/property-events-1.md). ### Capital Growth The annual rate at which a property's value appreciates. Expressed as a percentage per annum. The default is 5% p.a. and can be adjusted per property. → See [Property Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/property-events-1.md). ### Capital Works (Div 43) A tax deduction for the construction cost of a building, claimed over 25 or 40 years depending on the property's age. Also known as Division 43 depreciation. This deduction reduces taxable rental income. ### Cashflow The net flow of money in and out over a period. ScaleConnect calculates cashflows at three levels: personal (income minus expenses), property (rent minus costs), and portfolio (the combined view). → See [Cash Flow Projections](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/cash-flow-projections.md). ### Construction Loan A loan that releases funds in stages (drawdowns) as construction milestones are completed. Modelled as a property event with builder's deposit, total build cost, and drawdown schedule. → See [Property Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/property-events-1.md). ### Cost Escalation The annual growth rate applied to operating costs and rental income. Defaults to 3% p.a. This assumption controls how expenses and rent compound over time across the simulation. ### Debt Outstanding The total remaining balance across all loans in a client's strategy at a given point in time. Shown on the Overview tab and tracked as a subgoal type. ### Deemed Acquisition When a property is treated as if it were acquired at its current market value at a specific date, rather than its original purchase price. Used when converting a main residence to an investment property — the CGT cost base resets to market value at the conversion date. ### Dependants The number of dependants for tax calculation purposes. Set as a personal assumption and can be changed at any point on the timeline. Affects tax offsets and thresholds. → See [Personal Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/personal-events-1.md). ### Depreciation The reduction in value of a property's building structure and fixtures over time, claimed as a tax deduction. Includes both Capital Works (Div 43) and plant and equipment (Div 40). Reduces taxable rental income for investment properties. ### Equity The difference between a property's current market value and the outstanding loan balance. Equity = Property Value − Debt Outstanding. ### Equity Available The usable equity a client could access without exceeding 80% LVR. Calculated as (Property Value × 0.80) − Outstanding Loan Balance. A positive figure means the client has borrowable equity. Tracked as a subgoal type. ### Event A one-off or scheduled change placed at a specific point on the simulation timeline. Property events include rate changes, refinances, and sales. Personal events include bonuses, expenses, and loan repayments. Events modify the baseline set by assumptions. → See [Property Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/property-events-1.md) and [Personal Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/personal-events-1.md). ### Fixed Rate An interest rate that stays constant for a defined period, regardless of market movements. In the simulator, a fixed rate period is set during the loan setup, after which the loan reverts to the variable rate assumption. ### Granny Flat A secondary dwelling on an existing residential property. Modelled as a property event that adds rental income and construction costs to the property's timeline. → See [Property Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/property-events-1.md). ### Gross Yield The annual rental income as a percentage of the property's purchase price, before deducting any expenses. Calculated as (Annual Rent ÷ Purchase Price) × 100. ### HECS/HELP The Australian government's student loan scheme. Tracked as a personal assumption with compulsory repayments calculated automatically based on income thresholds. Use the HECS event for voluntary repayments or balance changes. → See [Personal Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/personal-events-1.md). ### Interest Only (IO) A loan repayment structure where only interest is paid for a set period, with no principal reduction. After the IO period ends, the loan converts to Principal & Interest (P\&I) repayments. Common for investment property loans. ### Investment Property (IP) A property purchased for income generation (rental) rather than personal residence. Investment properties generate rental income, operating costs, and tax deductions (including negative gearing) in the simulation. ### Joint Tenants An ownership structure where two or more people own a property in equal shares. If one owner passes away, their share automatically transfers to the surviving owner(s). Income and deductions are split equally. → See [Ownership Structures](/scaleconnect-docs/simulator/adding-properties.md). ### Land Tax A state-based tax levied on the value of land owned above a threshold. The threshold and rate vary by state. Modelled as an automatic calculation in the simulation based on property location and land value. Can be overridden with a Land Tax Override event. → See [Property Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/property-events-1.md). ### LMI Lenders Mortgage Insurance — a one-off premium charged when the loan-to-value ratio exceeds 80%. It protects the lender (not the borrower) against default. LMI is included in acquisition costs during the strategy builder. ### Low-Value Asset Pooling A depreciation method where plant and equipment items costing less than $1,000 are grouped into a single pool and depreciated at a flat rate, rather than individually. Applies to investment property tax deductions. ### LVR Loan-to-Value Ratio — the loan amount expressed as a percentage of the property's value. Calculated as (Loan Balance ÷ Property Value) × 100. An LVR above 80% typically triggers LMI. The simulator tracks LVR over time as property values and loan balances change. ### Main Residence (PPOR) The property the client lives in as their primary home. Also called Principal Place of Residence. Main residences are generally exempt from CGT. When a PPOR is converted to an investment property, a deemed acquisition applies. ### Negative Gearing When the costs of owning an investment property (loan interest, operating costs, depreciation) exceed the rental income. The resulting loss is offset against the client's taxable income, reducing their tax bill. The simulator models this automatically. ### Net Operating Income Rental income minus operating costs for a property in a given period. Does not include loan repayments or tax effects. A negative figure means the property's running costs exceed its rent. ### Net Yield The annual rental income minus operating expenses, expressed as a percentage of the property's purchase price. Calculated as ((Annual Rent − Annual Operating Costs) ÷ Purchase Price) × 100. ### Occupancy The percentage of time a rental property is tenanted. Defaults to approximately 90% (\~47 weeks per year). Adjustable per property in the cashflow settings of the strategy builder. ### Offset Account A transaction account linked to a home loan where the balance reduces the loan principal for interest calculation purposes. The simulator models offset deposits and withdrawals as personal events. → See [Personal Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/personal-events-1.md). ### Operating Costs Recurring expenses for a property — management fees, maintenance, insurance, council rates, body corporate, and other outgoings. Defaults to $1,200/month and escalates at the cost escalation rate. ### Partial Rental When a portion of a property is rented out while the owner occupies the rest. Modelled as a property event that adds partial rental income and adjusts the CGT and deduction calculations accordingly. → See [Property Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/property-events-1.md). ### PAYG Pay As You Go — a system of tax instalments paid directly by the taxpayer (typically sole traders, contractors, or investors). Tracked as a personal assumption in the simulation. → See [Personal Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/personal-events-1.md). ### Portfolio The complete collection of properties and financial positions across a client's strategy. The portfolio view combines all properties, loans, personal income, and expenses into a single projection. ### PP\&E Plant, Property & Equipment — depreciable assets within a rental property such as carpets, appliances, air conditioning, and blinds. Depreciated under Division 40 of the tax code. ### Principal & Interest (P\&I) A loan repayment structure where each payment covers both interest and a portion of the principal balance. Over time, the loan balance reduces to zero at the end of the term. ### Refinance Replacing an existing loan with a new one — typically to secure a lower interest rate, change lender, or access equity. Modelled as a property event with new loan terms. → See [Property Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/property-events-1.md). ### Rental Growth The annual rate at which rental income increases. Tied to the cost escalation assumption by default. Affects long-term cashflow projections for investment properties. ### Stamp Duty A state government tax on property purchases. The amount varies by state, property value, property type, and buyer status (e.g. first home buyer concessions). Included in acquisition costs during the strategy builder. ### Strategy The core unit of simulation in ScaleConnect. A strategy combines a client's profile, properties, loans, events, assumptions, and goals into a projection of their financial position over time. → See [Strategies](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/strategies.md). ### Sub-strategy A cloned copy of a Base Case strategy used to explore alternative scenarios. Sub-strategies are independent — changes to one don't affect the Base Case or other sub-strategies. Can be deleted at any time. → See [Creating a Strategy](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/strategies.md#cloning-a-strategy). ### Tenor The total term (duration) of a loan, expressed in years. A 30-year tenor means the loan runs for 30 years before the principal is fully repaid (assuming P\&I repayments). ### Tenants in Common An ownership structure where two or more people own a property in defined (not necessarily equal) shares. Each owner can dispose of their share independently. Income and deductions are split according to ownership percentages. → See [Ownership Structures](/scaleconnect-docs/simulator/adding-properties.md). ### Trail Commission An ongoing commission paid to the broker for the life of a loan, typically a small percentage of the outstanding loan balance per annum. Tracked per property in the strategy builder. ### Upfront Commission A one-off commission paid to the broker when a loan settles, typically a percentage of the loan amount. Tracked per property in the strategy builder. ### Variable Rate An interest rate that fluctuates with market conditions. In the simulator, the variable rate assumption defaults to 6.5% p.a. and can be changed per property or overridden with a Rate Change event. → See [Property Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/property-events-1.md). ### Voluntary Repayment An extra payment made against a loan above the minimum required repayment. Reduces the principal balance and shortens the loan term. Modelled as a personal event linked to a specific property loan. → See [Personal Events](https://github.com/scaleapp-au/scaleconnect-docs/blob/main/help-centre/personal-events-1.md). --- # Agent Instructions This documentation is published with GitBook. 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