Hi All,
First Post – Thanks in Advance for your assistance.
I bought my first place this year and have since been given pre-approval by the council to sub-divide the block. I've just kicked off the process and hope to have the block divided and listed under its own title come March next year.
My question is – can i sell any part of the land purchased under the FHOG within the first 12 months of owning it, without having to pay any fees ??
When I bought the property I was told I can't sell it for 12 months otherwise i'll have to pay back the FHOG, but what if i keep the house on the front of the block and sell the parcel of land at the back – will this attract fees or is it best to wait for the 12 months to pass ??
Hoping someone has an answer for this as it will help determine my holding costs if i have to wait.
Cheers,
Darren
if you enter a contract for the vacnat part before 12 months have elapsed you will be paying CGT and not be eligible for the 50% discount
Thanks crj,
I have the ability to build on the back block, which will put it past the 12 month timeframe, making it eligible for the 50% discount. But as this is my first project, and in the interest of making cash in the 'Quickest Time' for the 'Lowest Risk' im wanting to do the sum's on selling the block without a building on it, verse's the holding and building costs i'll have to pay otherwise.
When I made the initial enquiries to buy the house I was told that I can't sell any part of my land within 12 months unless I pay back the FHOG (gov help line info). I thought this was a little odd and wanted to know if there was any truth in it. I can't find it listed anywhere online (only the information you provided regarding the CGT 50% discount).
$14k may make or break my decision to sell early or wear the build and hold costs.
Cheers,
Darren
HI Darren
from the first home grants site
http://www.firsthomegrants.com.au/Requirements:
• You must be an Australian citizen or permanent resident
• Have never owned property in this country
• You must have lived in Australia for at least six months;
• You must be over 18-years old
• You must be buying or building your first property as a person, not as a company or trust
• Neither you or your spouse must have claimed this grant previously
• An eligible home must be located in Australia and be a new or established house, home unit, flat or other type of self-contained fixed dwelling that lawfully can be used as a place of residence
• You must live in the property for at least six months out of the first twelve months immediately after purchaseThanks PI101,
Unfortunately, during my search of the site I couldn't find any information on sub-dividing and selling.
I've lived on the entire block for over 6 months (so I've past that hurdle), however i'm not sure of the 'legalities' if sub-divided within 12 months. Will the FHOG even come into play ??
Still seem's to be a bit of an un-known ??
To All: Have you, or anyone you know, split a block within 12 months that was purchased using a FHOG ??
Cheers,
Darren
Why don't you call the FHOG people and ask? You probably won't have to give your name if asking general what if questions. Then you can report back to us and share the knowledge!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
By the time the block is split will it be close to 12 months ? Why not wait it out and not take the risk – put the DA in and I think you have 4 years to execute it – do so on selling the block and pay the fees on settlement.
Assuming that cost is driving you to sell before 12 months is up that could be an option.
4 years is my councils rule but you should check your own to make sure
Dare I say – because it's painful waiting for 45 mins to talk to someone who at the end of it can't answer my question (then cuts me off when they try to transfer me !!)…
So I've been on hold for most of the morning to a couple of areas, here's what i've found out:
Re the FHOG – Because i've lived there for more than the 6 month period, they have no concerns what I do with the property (so I can Subdivide without affecting the FHOG). I dont know where you stand regarding a sub-division if you haven't lived in the house for 6 months tho (especially if you plan on staying there past the 6 month period).
Re the Selling prior to 12 months – While I haven't had proper confirmation (waiting on a return phone call) it appears that it will follow the typical CGT and 50% discount process mentioned above. I personally can't see how I can get around this (property is in my own name, not in a company name) and if anyone has a suggestion, i'd be happy to hear it .
Based on this, i'll whip out the calculator later tonight, work out estimated profits for both the sale of land and the sale of a completed property – minus the CGT for the land and the Holding/Build costs for the property – hopefully helping me decide on which avenue to take.
Thanks All – I'll update the post if the call back I get presents any new information.
Cheers,
Darren
Update To Post:
Hi All – I finally got the call back I was waiting for and have a little more info to share.
If you purchased using the FHOG and sell all or part of your land within the first 12 months, then you'll have to pay back the First Home Concession that was initially waivered (the Stamp Duty).
This means, if I sell my sub-divided back block before the 12 months is up i'll be stung with $1050 for the first $75,000, plus 3.5% of the remaining purchase price. While it's not the $14,000 I was initially told, it's still a fee that i'll look to avoid !!
All of the information I have provided in the post is based on my specific circumstance in Queensland, im not sure if there are different rules across the states.
Hope this has helped.
Cheers,
Darren
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