First Property - How Do People Get The FHOG When They Dont Live In It?

Viewing 6 posts - 1 through 6 (of 6 total)

sarahj1988
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@sarahj1988
Join Date: 2011
Post Count: 2
August 26, 2011 - 6:01 am
Hi guys,
Is it legal to buy a property as my principle place of residence but have people living with me and paying rent directly to me. Would I still receive the FHOG?
And how do people get away with receiving the FHOG and they don't even live there??
Tassie develop
Member
@tassie-develop
Join Date: 2011
Post Count: 2
August 26, 2011 - 6:22 am
Hi Sarah,
My understanding is that receiving rent would not be legal even if you were living there. Technically this makes a proportion of your house an investment and thus a proportion is subject to CGT, etc. Obviously plenty of people must have done this and received "Cash in hand" no receipts…. But i think you could still get done if caught.
As for getting the FHOG and not living there…. If you have bills going to the address whos to say you aren't living there…. until the new ATO super computer catches up with you.
Probably better to do things (mostly) by the book. <moderator: delete language> you can't get FHOG for an investment place; typical Australian punishment for trying to get ahead and be smart about things.
Good luck,
Tassie
Catalyst
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@catalyst
Join Date: 2008
Post Count: 1,404
August 26, 2011 - 6:25 am
sarahj1988 wrote:
Hi guys,
Is it legal to buy a property as my principle place of residence but have people living with me and paying rent directly to me. Would I still receive the FHOG?
If you live there it is your PPOR. If you have boarders it's up to you (legally you should declare it). So it's not really rent as in you wouldn't have a rental agreement, but maybe a shared housing agreement.

sarahj1988 wrote:
And how do people get away with receiving the FHOG and they don't even live there??
Well lot's don't. There have been a lot of cases investigated. Some live there for the 6 months. Some that just buy and don't live there and wait for the 6 months to be up have been caught because there is a VERY low electricity bill. Be careful.
I guess some get away with it though.
Jamie Moore
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@jamie-m
Join Date: 2010
Post Count: 5,069
August 26, 2011 - 6:39 am
Catalyst wrote:
Well lot's don't. There have been a lot of cases investigated.
Like this one recently – https://www.propertyinvesting.com/forums/property-investing/help-needed/4337779
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
August 26, 2011 - 7:29 am
Of course it is legal to have someone pay you rent for your PPOR. Whether you can still get the FHOG is a different matter, but without looking into it I would think it could be possible if you are still living there for at least 6 months.
Tax is a separate issue to consider and you would lose the CGT exemption on part of the property possibly
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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colinnewland
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@colinnewland
Join Date: 2006
Post Count: 128
August 26, 2011 - 9:40 am
It is legal to have a boarder/house mate/friend in your house who makes a 'contribution' to household expenses (power, water, gas, interest, renting furniture, wear and tear of equipment etc). You both decide what is fair.
As for the ATO, cost sharing/recovery should not be defined as income nor should it affect your CGT exemption.
It should not affect your FHOG either as long as YOU occupy the property for at least 6 continuous months, starting within 12 months of settlement/completion.