Hi everyone, this is just my second post on these forums, hopefully there are many more to come!
I am just 16 and obviously the first home owners grant (FHOG) will be an important resource in the purchase of investment properties. As everyone knows the FHOG is not allowed for investment properties, only as a principle place of residence (PPOR). However there are loop holes where you are aloud to sell, or rent the house after a certain period of time.
Now my understanding was that this period of time was exactly one year, so that you can only sell or rent out the property after you have lived in it as PPOR for a year. I think I read this fact in Australian Property Investor magazine (API) about a year ago. However I recently saw one poster on these forums state differently, that in fact it is 6 months not a year. Was this law changed recently?
My second question is in regard to the definition of PPOR. How does on define this term? Do you have to live in the property for every day of the 6 months? Or is it simply that you must live in it for the majority of those 6 months?
I look forward to the replies from my post, thanks to everyone who takes a look.
All the info you need is available at…
If you read that ‘fact’ in API, it was an error. There has never been a requirement to live in the property for one year.
Previously, you had to move into the property within one year. There was no time restriction attached to this so people were moving in for one day and then renting out the property to take advantage of the FHOG (First Home Owner Grant).
Last year, the rules were changed and required occupation for 6 months starting within one year. What this means is that you can rent out the property for 364 days and then move in on the 365th day but have to stay there for 6 consecutive months to maintain your eligibility for the FHOG or you would have to pay it back.
You could also live in the property for the first 6 months and then rent it out without any problems.
PPOR is just Principal Place of Residence. It is merely where you live. It has nothing to do with the 6 month FHOG requirement. As outlined above, you have to live in a property for 6 consecutive months (every day) to be eligible.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksWelcome to the forum mate and conragulations on having an interest in your financial future at such an early age – wish I had known something about it then!!
The FHOG is quite simple. You must live in the home for 6 months starting within the first 12 months.
As far as every night goes it isn’t worked out like that. Proof of occupancy is demonstrated by having your mail go to the home, having the utilities connected in your name and having your license, electoral enrolment etc at that address.
So if you live there but go away for a holiday or such it doesn’t affect the time length.
Well done
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks for the quick replies, which perfectly clarified everything. I suppose it is easy to get confused. Another more broad question in regards to first home owners. I know that in NSW you are exempt from all stamp duty. I also heard that in Queensland they give you a further $3 000 on top of the FHOG, perhaps this is wrong? Do any other states give such generous incentives?
It differs in every State. The information is available at…
Go take a look and ask any additional questions you may have after that.
Just so you know, a lot of the benefits may be gone before you become eligible as you are not yet 18. They may even be better. No-one really knows what the Federal or State Governments intend to do regarding FHOG and other concessions.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksThanks for the link Mortgage Adviser, thats an excellent site. An interesting point on the website states that this 6 month period begins after settlement, rather than after title transfer. So it is entirely possible to arrange a 6 month settlement period, to do up the place a little, then collect rent at the same time you start to pay the mortgage. Of course you would have to find a most flexible vendor first!
Also from some of the links off your site it is interesting to note that the FHOG has actually been changed a few times. On two occasions Howard doubled the FHOG to $14 000. He also did it in most peculiar times, when the property market was raging. So there was no real incentive needed it appears. Is it quiet likely that the FHOG at a national level will be altered again?
Just regarding title transfer, this occurs at settlement.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential Linksdoes any one want to clarify here, that fhog applies to every property (including new and existing one) ?
as my understanding of reading, the fhog and victoria grant (12000), only apply to new home, existing building only have fhog ?
is that correct ?
FHOG at Federal level applies to any home.
Each State & Territory has their own additional benefits and / or stamp duty concessions which vary.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential Links
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