ADVICE NEEDED – Private Tenant wants bond reciept!
I have brought a house as a 1st home buyer to get the grants etc, and there is a loop hole so sort of i dont have to live in the house for 12 months, but sort of i do, im sure many of you are familiar with this QLD loophole.
Anyway, i dont want to stuff anything up, my tenant transfered me the bond money and has asked for a bond reciept.. fair enough .. but i obviously cant do it with the RBTA so can anyone suggest what i write on the reciept?
A friend suggested i write something to the effect of not ‘the tenant’ but rather ‘the caretaker’ something like that .. but apart from their suggestion i really urgently would love to know your oppinions .. email me, or post here in the forum .. :-0
Thanks so much xx Dutch [cigar]
How dare they !!!
What do they think…they have rights???Seriously, the tenant is entitled to a receipt for the bond, as well as for the rent they pay.
In WA it is possible to open a ‘bond’ account at a bank and lodge the security bond there.
If this is possible, then provide the tenant with a copy of the credit statement for that account.
Usually the account is opened in the landlord’s name ‘as trustee for’ the tenant.
kp
I know .. how dare they ask for a recipt .. *giggles*
I actually dont mind giving them one, its just that i have to do it in such a way that im not doing anything possibly in a loophole *wink wink*
What i want to do is put in my lik e’award saver’ account and just write them out a reciept .. can anyone supply me with a template or wording for a bond reciept?
Hmmmmmm….
Now you’re stretching the friendship.Why not just issue a receipt out of a ‘receipt book’ bought from the local newsagent or stationery shop?
Otherwise, type up a doc on word to this effect:
Heading: ‘Security Bond Receipt’
Received from < John Doe > the sum of $xxx.xx being for security bond for the property at < address > rented out for the period of < commencement date > to < completion date >Sign it and pass onto the tenant.
Its better if you open a seperate account specifically for the bond ( thats been my experience anyway…)
kp
Can you explain this loophole that lets you use the FHOG and not reside in the property?
Thanks
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[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.
Hi Dutchess,
If it is a legal loophole than all should be OK. There is no need to worry and just issue a legit receipt.
If you are trying to do something that is not legal my advice would be to confess your “mistake” ASAP and offer to pay back what you owe – most likely the authorities will be quite reasonable with you.
On the other hand if you are caught out trying to do something illegal by the authorities before you contact them about the “mistake” it is likely (from what I have seen) that they will be less than friendly about it.
Take care with this situation.
Sonja
Mortgage Hunter, I dont have the exact document in front of me at the moment, however the Documents i recieved from the QLD FHBG department, worded the documnt i had to sign similar to this” You must move in within the ist 12 months, to be able to take this grant”
They suffed up a little i think .. my lawyers say you have to reside in the dwelling for 1 year when yu buy the house, however the document says yo uhave to move in within one year, …. so basically after renting it out privatly for a year, i have got my grant, i dont ever have to move in cause whos to say i havnt been living there for a year ? and i can continue renting it.
Thats basically what that document said when i find the thing, and i doubt i will as i think its interstate, ill quote it to the word for you. Maybe if you do a google search y0u can find out more if yoru interested.
Cheers Dutch c
Hi Duchess,
I think you need to re-think your approach as it seems, to me, that you are endeavouring to do something which is outside the FHOG guidelines.
Sure you may well get away with it – but the organisations involved do random checks to ensure the agreement is upheld.
Here are some of the questions and answers from FHOG Qld FAQs http://www.osr.qld.gov.au/gas/fhog/faq_residency.htm
When do I have to take up occupancy?
For applicant(s) purchasing an existing home, occupation of the home must commence within 12 months of taking possession of the home ie. on settlement or completion of construction. For applicant(s) having a home built, occupation of the home must commence within 12 months of the home passing final Council inspection.
[+]How long must I reside in the property to establish it is, or will be my principal place of residence?
* If you have entered into an eligible transaction prior to 1 January 2004, there is no minimum period that you are required to live in the property to maintain your grant eligibility, however, the onus is on the applicant(s) to prove that they have lived in the property as their principal place of residence, if requested by the Office of State Revenue.
* If you have entered into an eligible transaction on or after 1 January 2004, you must occupy the home as your principal place of residence within one year of completion of the eligible transaction and remain in continuous occupation for a period of at least six months.[+]Is it possible to rent the home out before I move in?
You may rent out the property before you move in, provided that you occupy the home as your principal place of residence within the specified 12 months.
Once I move into the home, is it possible to rent out one or more rooms in the home?
All applicants are required to occupy the home as their principal place of residence within 12 months of settlement or completion of construction. If your personal living arrangements do not impinge on your ability to make the home your principal place of residence, the Commissioner would be satisfied that the residency requirement has been complied with.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Dutchess,
It seems like you’re sailing pretty close to the wind. I’m not sure whether I would have broached this in a public forum – you never know who could be reading and a forum alias is no protection.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auWhen do I have to take up occupancy?within 12 months
[+]How long must I reside in the property to establish it is, or will be my principal place of residence?
If you have entered into an eligible transaction on or after 1 January 2004, you must occupy the home as your principal place of residence within one year of completion of the eligible transaction and remain in continuous occupation for a period of at least six months.
Q -Once I move into the home, is it possible to rent out one or more rooms in the home?
A- All applicants are required to occupy the home as their principal place of residence within 12 months of settlement or completion of construction. If your personal living arrangements do not impinge on your ability to make the home your principal place of residence, the Commissioner would be satisfied that the residency requirement has been complied with.
Thats the mail i got from the FHMG peoples ..
What im doing is ok then … Im renting out my house privatly … in fact so privatly that after 6 months .. whos to know i havnt been living there for 6 months with my tenants …. ?
Satisfying the criteris of moving in within 12 months and living there for 6 consecutive months ?So it is legal… but by not living there its not …so i guess its not.
But it is in the fact im renting it out, even if i do move in before my 1 year is up, that would keep everything above board ..
Mortgage Hunter .. i just dug up an old post of mine and the reply yo uhave .. he he actually i think it was y uthat told me about the loophole hun .. xx
—-
Mortgage Hunter
Moderator [2758 posts]
Posted 01/09/2005, 08:35:17Jacob is correct – you can rent the property for 364 days then move in for 6 months.
This loophole was designed so that people buying homes already tenanted could honour the lease yet still move in at the end.
Cheers,
Simon Macks
Residential and Commercial 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.
You’re spinning me out Psych, weren’t you just Duchess ?
I know 2 people that got caught not moving in within the first 12 months. They did not have all the bills, electoral role etc changed to the new address.
You can’t make the tenant have the phone connected it needs to be in your name.
Mal
Getting out of your comfort zone, can help you become comfortable
Derek found out that: You may rent out the property before you move in, provided that you occupy the home as your principal place of residence within the specified 12 months.
This is what I always thought as well.
I can not see anything wrong in what you are planning to do since it seems al legal, psychiatrist.
If I’m understanding this correctly, you want to:
1. Buy a property using the FHOG.
2. Rent it out for 12 months minus 1 day.
3. Move in yourself before the time limit (12 months).
4. Live there for at least 6 months.Nothing wrong with that so far.
To make 100% sure, I would write to the FHBG dept and tell them about your intentions, be open and tell them everything.Since it is all legal what you are doing, I can’t see why you couln’t get a proper bonds receipt for your tenants.
And would there really be an issue about the telephone connection, since it is legal to rent out this property for 12 months (minus one day)?
I can’t see why it would be an issue…Oh, just adding that I wouldn’t stretch it with renting out a room. You can ask the FHOG dudes, but I wouldn’t count on a YES.
But there is nothing against renting out a room after the 6 months of you having occupied the house is over, is there?
Celivia
Please don’t use my advice as any authority to commit fraud. I said that you had to move in within the first year for a 6 month period. Your lawyers are wrong – no surprise there.
If a person does not move in before the end of the first year and stay there for at least 6 months then they are defrauding the Commonwealth and are a criminal.
Lets not all wink and sugar coat it – this is theft and they will probably be caught and fined. They may end up with a criminal record out of this.
I expect that you are intending on moving in before the year is out. This is no loophole – it is exactly what the legislation describes and allows for.
With that in mind then you should lodge the bond with the Bond Authority in your state – you have nothing to hide.
All the best,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[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.
My first home ever was rented to students when I bought it and I have also discussed with investing buddies whether a purchaser could let a tenant fulfil the obligations of the FHOG in lieu of the actual proprietor of the property (i.e. you).
I was advised by people, as Derek has noted, that checks are made. Some may be real estate urban myths but I have been told that checks include:
– checking that the name on the phone account and name of the owner are the same
– matching addresses to records at the offices of local property managers
– checking that electricity, gas etc are actually being consumed at the propertyIf these checks are random, then maybe you could get away with it. But that makes your idea akin to gambling, which is not a habit to cultivate if you’re going to be an investor. I personally chose, on the advice of some folks (salespeople in the Investor’s Club actually, so they’re not all bad) to keep it all squeaky clean in the eyes of the law and the state revenue dept. Just easier that way, plus it makes the following year’s tax return more interesting than usual. Sonya, Derek, depreciator and Mortgage Hunter have given similar advice it seems, i.e. keep your nose clean.
What’s wrong with keeping it tenanted for most of the year and moving in for 6 months afterwards? Is it a real dump or something? (if so, don’t ask Dazzling for his opinion, he’ll give you a serving of “get off you’re ar$e†in no uncertain terms!)
Don’t forget, Kiyosaki has stated in one of his books that making money legitimately is too easy to bother with illegal strategies.
Bob
Thanks all for your advice, its been extremly helpful as always in helping me with my final decision.
A wonderful support network we have here.
Cheers..
Hi D/P,
it might be easier to move in FIRST for the 6 months and then rent it out as tennants might not like the “short term arrangement, and then it wouldn’t matter if you did give them a receipt!
And you get to know your house first hand – nobody can then pull the wool over your eyes and tell you that this is wrong or that doesn’t work because you’ve been there you know it!just a thought
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas Edisonhi Psychiatrist
I would change my name back if I was you I thought the other was better but I’ll add my .002.
a few people will know that I’m very creative with a pen but I don’t nor would I gamble an thats what you are thinking of doing. checks or no checks the dept of anything has very big pockets and they don’t take prisoners so for the risk you are taking and this is a investor board so you look at risk against return the return in your case is not worth it.
sit down and work out if the dept take a dim view and they may what is your loss.
I’ll tell you a lot.
I would do as simon has said and make sure all business transactions are above board and very transparent and as depreciator has posted the last place I would ask for this advice would be on a bulliten board.
but thats my answer.
If you are in business and that is what you aspire to be (by being an investor )you will be audited and when you are it must very transperant.
you are the start of a long journey so don’t start off with three wheels on the car.here to help
A few of my thoughts:
1) A LOT of people have been caught doing what you describe and not moving into their properties. They have had to repay the original grant, and in many cases, additional costs & penalties have been imposed.
2) As a result, the number of checks has been INCREASED.
3) Here are some ways they may catch you out:
– Utilities (electricity, telephone, water, gas) NOT in your name.
– Utilities in your name at an alternative address.
– Utilities in another person’s name.
– No change of your postal address, license address.
– Talking with your neighbours.
– Talking with your tenants, “When did you move out?”, “Can we see the bond reciept/ evidence of bond repayment?”
– Continued money transfers or cheques from tenants to your bank account (yes, they have the power…)
– etc…Please note, I am not trying to give advice on how to defraud the common wealth of Australia, just pointing out that it is very easy for them to prove you have done so.
4) Don’t think for a second that you’re ‘off the hook’ once you’ve made it past the first year. You implied here:
…. so basically after renting it out privatly for a year, i have got my grant, i dont ever have to move in cause whos to say i havnt been living there for a year ? and i can continue renting it.that this is the case. You will still have broken a legally binding commitment, and can (and should) be penalised.
That’s all I have to say to you. Please note that I have been very restrained, as what I would really like to convey to you would doubtlessly result in a permanent ban from this forum.
F.[cowboy2]
In Victoria I understand that if you don’t register your bond with the RTBA you can be fined an amount comparable the the FHOG. Might want to think about that too…
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