Hi,
I wonder If someone in the forum can help me. I would like to use the FHOG to buy a residential property. I come across a property of interest, but is tenanted. Would that be affecting the FHOG? since there will be rental money flowing in. How would I go around this? Will it help if someone else receive the rental income but the property under my name?
Thanks for the help.
wishing all a happy and prosperous new year.
I am in WA and researched this question before buying anything. Here, if you buy an investment property and never live in it, you cannot claim FHOG on that property but can still claim it later for your first PPOR. Ask your state revenue department to confirm this. WA’s is at http://www.dtf.wa.gov.au/cms/osr_content.asp?ID=344.
The answer is simple. You have 12 months to move into the home and still keep the FHOG. This is longer than most normal existing leases.
You will need to occupy it for 6 months from when you do move in.
Hope this helps.
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.
Hello catherina38
The thing you might like to check with your accountant is the CGT consequences if you ever sell.
If, except for the period of the current lease, you always use it as your PPOR and then sell, then it should not be a problem. However the ATO treat the few months you rented it out first, the consequences will be minimal.
The problem may be, and this is what you may like to check, if you first use it as your PPOR and then as an IP.
Maybe someone here knows the answer to this?
Cheers [smiling]
ElkaYes, I am clear that i’ll have 12 month to move in to the new home. But, the tenants that were already there will then be paying rent to me. Many say I can’t do that. The thing is I don’t care about the rental money because I want to live there.
Please anyone opinion or experience in this to let me know how to go about it.Ta.
catherina.Originally posted by catherina38:Yes, I am clear that i’ll have 12 month to move in to the new home. But, the tenants that were already there will then be paying rent to me. Many say I can’t do that. The thing is I don’t care about the rental money because I want to live there.
Please anyone opinion or experience in this to let me know how to go about it.Ta.
catherina.Don’t listen to those people – they don’t know the rules. Ask them to show you the legislation to back up their claims – there is none.
Of course you can receive rent. You also have to declare it in your tax but that allows you to claim all costs such as interest, repairs etc for that period. This wont affect your FHOG.
Ask your solicitor to confirm all of this when you talk to him about how he acts for you.
There will be a CGT issue but as it is just months then it should be negligible if you hold the property as a home for the long term.
All the best,
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.
Yes friends can have good intentions but often offer advise that is not founded. For your own satisfaction you can make a call the office of state revenue
Telephone the Client Contact Centre on 1300 300 734. THis is the qld branch not sure where you are? but do a google search for office of state revenue “your state”Wayne
Mortgage Adviser
Email [email protected]
http://www.alphamortgagesolutions.com.au
Refinace, Loan Consolidation, Owner Occupied or Investment Finance. Free Service we come to you!Simon, you make it clear for me. I heard the same thing too, but somehow the way you explained it clicked. Called the SRO too, and yes, I can keep the FHOG.
Thanks all.Hi Catherine,
Well it looks like you’ve got your question answered but I thought I’d post this extract from http://www.propertydivas.com.au for you anyway.First Home Owners Grant
In order to offset the impact of the introductions of GST, the government introduced the First Home Owners Grant (FHOG) on 1 July, 2000.
Who is Eligible?
A natural person (not a company or trust) aged 18 years or over wo are Australian citizens or permanent Australian residents (Individual State Laws may vary)
Neither person, nor their spouse/defacto must have owned a home in Australia or previously claimed the grant in Australia.
An eligible property must be located in Australia, and may be either a new or established property that is self contained and fixed permanently (ie must have a bathroom and kitchen and not be a caravan or similar) and lawfully can be used as a place of residence.You must intend to occupy the home within 12 months of settlement, or make an application for occupancy within 12 months of completion of construction. You must also intend to occupy the premises for a continuous period of at least 6 months. (State laws may vary)
Frequently Asked Questions
Do I include the $7000 grant in my tax return? No,there is no tax payable on the grant.
Is the FHOG means tested?
There is no means test required to receive the grant.What kind of property can I purchase?
The grant is available for any single dwelling, duplex, flat, townhouse etc. that is fixed in place and suitable as a residence. The grant is not available for extensions/renovations to an existing building or for the purchase of vacant land.How do I apply
Application forms are available through an approved FHOG agent, a Solicitor, or from your Office of State Revenue (Refer on-line below)Can I use the $7000 as a deposit on a contract?
No, the grant is only payable upon completion of the transaction at settlement.Can I received the grant for an investment property?
Yes, provided that you occupy the property as your principle place of residence within 12 months of purchase, otherwise the grant must be repaidHow long is the grant available for?
At this stage no closing date has been made.How is the grant paid?
The grant can be paid directly in to your nominated bank account OR directly to the builder as part of the first progress payment OR in the case of an owner builder, upon receipt of the Certificate of Occupancy.Further Information
For further information contact http://www.firsthome.gov.au or your Office of State Revenue:
ACT http://www.revenue.act.gov.au
NT http://www.nt.gov.au/ntt/revenue
SA http://www.revenuesa.gov.au
TAS http://www.treasury.tas.gov.au
Finally, don’t sign anything before checking it with your Solicitor!!
AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”
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