We are currently getting set up to purchase our first investment property. Is there a way we can utilise the First Home Owners Grant? Do we have to live in property for a specific time and can then rent out becoming an investment property? WOuld appreciate any info anyone can provide.. It just seems a little silly not to use the FHOG – after all how long would it take to save the $7K? All info/advice gratefully accepted!!!
Leigh-AnnLeigh,
The FHOG is for people buying a home. In order to qualify you must intend living in the property and subsequently occupy that property within the first 12 months. You must live there for a minimum period of 6 months.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
FHOG – buy then rent it out for 11.9 months…move in 6mths then rent it out again.
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]The legisation regarding the FHOG is a little wishy washy. But there are some key factors to note. The logic behind giving owners the outlet to rent the property out first, is in the situation of the purchased property having a tenant. I know that people have discussed the fact that you must move in within 12 months, but that is not in the legislation, rather it is a guide.
OSR looks at your intention to live in your house at the first opportunity. Obviously if there is a tenant then you can’t really kick them out until the lease if over which is the reasoning for the 12 month period. Should you then renegotiate the lease for another couple of months, the OSR would consider that you breached the legislation as you did not intend to live in the house, rather you used it as a investment unit, as you didn’t move in once the lease was up.
Should you have purchased a property without a tenant and then found a tenant to rent it out to after purchasing the property during the initial 12 month period, the OSR would have a very strong grounds to disclaim your $7,000 grant.
From what I understand the OSR will be reviewing situations like this, as there are alot of people rorting the FHOG system.
Hi Steve
I just read with interest the feb newsletter and wanted to thank you for the info provided. When I talked about the $7K FHOG it wasn’t so much the lure (wrong word) of the money, my thought pattern was were we silly not to utilise it whilst available therefore as you mentioned giving us a bonus deposit? Either way we have decided that renting and buying an ip is the way to go for us in order to achieve our goals. We too are prepared to wait for the gratification of our dream home!!I also found some confusing info in relation to the FHOG and ip ownership – if I have read it correctly then we can buy an ip and providing we have never lived in it, we would still be eligible for the FHOG?. Can anyone clarify this is correct or have I misinterpreted the info.
I just wanted to say that the forums have been an amazing place for us – we have been reading and asking on many subjects and I thank all those participants who freely offer their thoughts and direction. Proud to be a part of it and very excited with where we are heading..
Woody,
Go to
http://www.mortgagehunter.com.au/first-home-owner-grant.html
Follow the links to your state department and you will see that it is essentially correct.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
Leigh-Ann,
This may be a basic question,
you say ” buy our first investment property”
If you and/or other interested person/s have previously purchased a property as a residence etc., that person/s will be denied a FHOG and that property will be ineligible for FHOG if they are going to participate.Regards
Rob Brown
Hi Rob
‘We’ are my husband and I and neither of us have purchased any property so we would be eligible for the FHOG should we choose to purchase PPOR.
Hi Davidc,
Should you have purchased a property without a tenant and then found a tenant to rent it out to after purchasing the property during the initial 12 month period, the OSR would have a very strong grounds to disclaim your $7,000 grant.is that true davidc, or could you simply justify yourself, to the OSR as interpretation of the agreement binding/allowing you to the FHOG, if you were to try to have it as much as possilby tenanted, and then move into the property in the last months.
Or am i stepping on some, loose grounds?
like for eg.. what if i was to do this… would this still be FHOG legal, plus capital gains tax free, plus lets say the property was -vely geared… can i possibly get away with this…. as this is my intentions later on down the track.
Heres is the example,
Purchase -ve geared property, have it tenanted, move in, on the 12th month, then further live in the property for 6 months, this in turn would turn the property into my PPOR, by which i would also use 1 of the bedrooms as an office to claim a further tax benefit and then after my 6 months sell the property and use the 6 year rule… to claim full capital gain.
but all in real reality…
1. claim tax benefits in -ve geared property
2. claim FHOG
3. claim percentage of property as 25% used for business purposes
4. use 6 year rule and avoid capital gains taxs
5. and if deprecitable will also claim that too (during the tenanted period)?is this all legally possible, or am i stepping on some loose grounds (loop holes)?
anybody? [:o)]
Cheers,
sisSIS,
claim percentage of property as 25% used for business purposes
4. use 6 year rule and avoid capital gains taxsI don’t think you get the 6 year exemption if you claim costs whilst living there.
You need to speak to the ATO or an accountant.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
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