Hello, this is my first post on the forum – what a find!! (‘[thumbsupanim]’)
Thumbs Up [thumbsupanim]I need some help with a decission regarding the First Home Buyers Grant and investment.
My wife and I bought our first property (a 2bdr flat) in brisbane while living overseas. As it was our first place, we were elegible for the FHBG. It is currently being rented, but to get the FHBG we need to live in the place for at least 6 months within the first 12 months. Originally, we planned to do this. Now, we are staying with family (rent free) as we have just had our second child, but im wondering if its worth getting the FHBG or just continue renting the appartment.
The potential rent of the flat is $953 pm (pre rental fees etc), our mortgage is $940 pm. The FHBG is a one off $7000.
My mortgage broker originally suggested it was better to get the FHBG as it would reduce our stamp duty as well, but I cant help think that we may be better off to continue renting the flat and make top ups to kill the principal of the loan. Six months of rent would be $5640, and the stamp duty is a few grand, but wouldnt we make more inrads in our loan if we were paying the rental income $940pm (plus $940pm top up from us (that we would have to pay for 6 months if we occupied it anyway)
I know this all sounds Iike havnt done my figures, thats true as I am about to do them properly – but does anyone have any suggestions out there or any clever tips. Any thoughts of what is the better option….????
Its great to find this website and forum…..
Thanks
BreakEven [strum]I suggest you consult an accountant specializing property investment because there are so many variables in your situation and to work it out properly would require exposure of all your financial details and I don’t think that’s a smart thing to do over the internet.
Also consider the capital gains issues that will impact you in different ways depending on if you live in it or rent it out.
Remember to consider tax advantages from investment properties and a depreciation schedule if your property is reasonably new.
I have links to the FHO grants for different states on my website if you want to check them out.
Todd Burns
http://www.freepropertyhelp.com.auYou don’t need to live in the property for 6 months within the first 12 months. You simply need to COMMENCE occupancy within the first 12 months of ownership. That is how I interpret the clause below from the govt. website anyway:
“Will at least one applicant be occupying the home as his or her principal place of residence for a continuous period of at least 6 months commencing within 12 months of either settlement or completion of construction?”
So in theory you could move in on the last day of the 12th month following settlement and still fit the criteria for eligibility.
Cheers,
Chris
Thanks chrisconuts! You are right, my hands were typing something other than what my brain was thinking. The property is rented up untill the 11th month of ownership, where we then plan to “commence” occupancy of the property.
I am still looking for a good property investment accountant in Brisbane to advise me of the best choice. I just had a little girl on Thursday, so Ive been a bit distracted. Thanks for the advice crusher..!
Cheers
BreakEven [skull]Personally wouldn’t bother moving in for the $7k if you have a good situation living rent free for the minute. Depends on if you are planning on moving in at all or even buying another house in which (as long as they keep extending the FHBG) gives you time to get another and claim it then instead.
It is interesting to note that in VIC you need to occupy the house for 6 months whilst Qld doesn’t have a set time, sould have to reasonable I’d assume, eg get your address changed for bills licenses etc to show you are making an effort.
You can claim it if you have already owned a home. It can’t be claimed on second or subsequent homes if you haven’t claimed one before, thats the way it reads to me anyways! [blink]
“To qualify for assistance, neither the applicant nor their spouse (or de facto) must have owned a home prior to 1 July 2000, either jointly, separately or with some other person.”
“Neither the applicant nor their spouse (or de facto) must have owned and occupied a home after 1 July 2000.”
Chris
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