Hi guys,
Im looking at getting my first IP next year, but i would also like to get the FHOG. After doin some research, i noticed that i need to live in the house for 6 months before i can rent it out. So my questions is, what does 'living for 6 months' actually mean?? I will have to move out of home, but would like to stay with the folks for as much as possible without neglecting the FHOB conditions. Can i just live in the property for a few days a month for the entire 6 months?? Whats that actual conditions of the contact when they say u need to live in the property for 6 months??
I just think i could save more money living at home then going out by myself. Any advice would be appreciated.I think you are supposed to move into the property and actually live there as your main residence. So changing all addresses to that address, getting the connections in your name etc will help. One of my clients got audited by the OSR and he had to supply a few documents to prove he had electricity connected in his name, phone, etc.
But be careful as there have been cases where they have checked the electricity usage and made one guy give back the money because he was hardly in the property.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
RR yes this is true. I heard of that one also.
They also ask the neighbours if you actually lived in the house and slept.
But this is rare, but has happened.
They know all the tricks, 6 months will go quickly, enjoy the freedom, it may do you good.HI Ferio,
Call me a prude….but if you are buying an IP – and want to claim the FHOG……..you have sort of missed the point of it all.
However, if you want to buy an IP, claim the FHOG anyway, and grab up to 14k of benefites from the government, and pay no or less stpam duty as well (depending on the state) then surely 'moving into' a house for 6 mths within the first 12 mths of buying it is not too much to ask now is it?
all the best with your new home…..
Just make sure you buy a property with an 18 month lease allready on it
adld, what's the reason to buy the property with a 18 month lease already?
_FeRiO, maybe change your perspective a bit and decided that you want to buy and live in your new home and spend a bit of time there and go to stay at your parents place as well when you want.
Make sure your letters get sent to the place you buy. Also you can rent the place out there is no law against that or you can rent some rooms and stay at the place a few nights a week. Plus you don't need to be living there, so you could rent for 12 months and then on the 365th day then start living there for the required 6 months.
By 12 months time you might even want to live on your own away from your parents. I'd rather have a choice of doing that then not!
There was an article in the latest API magazine which discussed the relative benefits of buying a PPoR vs IP for first home owners. I found the article really annoying however, as it showed such marginal differences compared to the huge effect stamp duty exemption can have. Stamp duty was mentioned just near the end of the article as needing to be considered, but it said this was ignored because they just wanted to compare the different methods of owning your first home/IP. This is quite silly, as stamp duty exemption is so much of a consideration in comparing the methods. Eg in Qld for a first home costing 350k, the stamp duty on an IP is $10675, compared to zero for a first home PPoR, or for a 500k IP (the max threshold for zero stamp duty for first home buyers) the duty is $15925.
With this in mind, the only sensible way to buy your first home/IP is to live in it for six months and claim the FHOG and the stamp duty exemption. Convert it to an IP after that if you wish.
One nasty side effect of renting it before living in it (apart from missing out on the stamp duty exemption) is the capital gains tax complication. You'll have to keep track of all costs associated with buying and owning the property (including all the time you live in it) so that CGT can be apportioned properly when it's eventually sold. The CGT will apply to the time when it was an IP.
The best part about living in it first is that you can keep it as a ppor even when it's being rented as an IP for six years after you move out (provided you don't have another ppor of course). There will be no CGT payable on any capital gain in that six year period. You can also reset and restart a new six year period if you just live in it for a short period after the first six years.So there are three big advantages of living in it for six months: FHOG, Stamp Duty exemption and the Six Year Rule.
Just one other thing: If you really wish to buy an IP as a first time property buyer, and still live at home, then don't ever live in your IP! All the above advantages can be done later with your first home purchase, as it's a First Home Owners Grant, not a First House Buyers Grant, ie you'll still be eligible after buying an IP.
Is it true that because my partner and I have aboriginal background could be eligible for an extra grant FHOG?FHOG- First Home Owners Grant + Aboriginal home owners grant?Also heard there are cheaper interest rates with certain institutions, is this true?
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