Hi,
Wondering once you claim the FHOG and have to live in it for months out of the first 12 what the government actually uses to confirm that you infact are living in it? (and not for example renting it out for cash to some international student hypotheticaly) Is it name down on the rates bill or something similar?
…Just have some time to kill and thinking outside the square, nothing illegal intended!
Cheers
Rates noitce (where it gets posted to),utilities bills/connection, your current residential address, (remember it is on your drivers license) Its no problem to prove if you are indeed living in the house and legitimately availing yourself of the grant. And you need to commence living in it for a period of 6 mths min, within 12 mths of purchase. (ie Buy in January, move in in November – stay in for 6+ months – longer if you are planning to live in it as your 'First Home'.
In most cases they don't check, but they are auditing a number or percentage of receivers of the grant. They will send you a letter and ask you to provide proof you were living there – then it is up to you – bills, electoral roll, rates notices, connections etc all can be used.
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
I recently just bought a townhouse using the first home buyers grant…U pretty much just need the rates/electrical/water bill in your name and you can rent out rooms and it will not effect the grant. My brother and his wife are leaving in two of the rooms and they are renting them off me. I've being told by my tax agent that there is some sort of tax advantage to this not sure how it works but if you google first home buyers grant there is a hotline and a FAQ website link that should solve any questions.
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Tony
Watch out with the claming of tax. It may save you a few dollars now, but end up with a huge CGT bill later.
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
Hey Andy,
I think was thinking of doing the same thing…. My idea differs slighty in that I want to use a trust structure:
So the process looks like this:
1. Purchase property
2. Live in it for 6 months and claim FHOB
3. Use money left over from FHOB to set up a trust and place property into it.
4. Property portfolio beginsThis way I can access the 14,000 and begin portfolio too.
Any comments or suggestions are greatly appreciated
Leumy
Mrleumy wrote:I think was thinking of doing the same thing…. My idea differs slighty in that I want to use a trust structure:
Nice idea – but you cannot buy in a Trust structure and also claim the FHOG – personal names only
Thanks propertunity,
I am aware that you can only claim FHOB if the property is bought in personal names… My idea is that once you have lived in it for 6 months and claim the FHOB, that you then transfer the property into a discretionry trust which would be set up 6 months after you lived in the property, thus meeting all the criteria for FHOB. Money from the $14,000 can be put aside to set up this trust.
I am not sure whether this idea is feasible, but it would make use of the FHOB???
Hello MrleumyI think there are several problems with this idea not the least being that when you transfer the property into the trust you will have to pay stamp duty again, which is an expensive exercise.
Some other problems are:-
If the property is negatively geared the losses will be trapped in the trust.
You lose the advantage of the 6 year rule of being able to rent out your PPOR for up to 6 years without spoiling it's CGT free status. ( Note this only applies if you did not rent out the property before it became your PPOR )
I can't see any advantage of moving this first property into a trust and certainly not so quickly.
If you search this site you will find many posts from people discussing taking advantage of the FHOG and then renting out. Most plan to do some renovations to add capital and rental value while they are living there.
Hope this helps
Elka
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