FHOG Can it be used buying an investment property

Hi Clintone,

Terry is right.

To be a bit more specific, you must live in the property yourself for the six consecutive months out of the first 12 months that you own the property.

Also, you (and anyone buying the property with you) must never have owned a property as a PPOR before (that is, you cannot have lived in a property that you owned AT ALL, even for a short time).

This does mean that you are allowed to own property solely for investment purposes (ie you don't live in it) before you apply for the FHOG, but only if you bought those investment properties after the 1st July 2001.

So, if you're prepared to live in – and pay the mortgage on – an investment property for six months before you rent it out, this is a great way to get money to start investing!

Taking an even longer-term view of it, you can also apply this to the First Home Savers Account, as long as you're happy to wait for four years and save steadily until you can access it. Right now, it may be more practical and lucrative (in terms of capital gains and increases in rental returns as well) to take the boost in the FHOG while you can though!

Hi CE

If I and another party purchase a home together and it is the first for both of us. Regretfully not you will only receive it once.

Obviously if you intend to rent the property long term make sure you structure the loan correctly from day 1 to avoid any issues down the track. Ideally I would be taking out a 95% interest only loan linked to a 100% offset savings account and deposit all of your income into the offset account whilst you are living in the property as your main residence.

If down the track you decide to purchase another property and rent the original residence out then I would switch the offset account to the new loan.

This will maximise your interest savings and preserve the tax deductability of the original loan.

Too many clients get this wrong so make sure your Mortgage Broker is investment orientated.

Yes very good posts above!

Another thing to be aware of is the factor of stamp duty.
I rung the stamps office for clarification however im not 100% certain, you need to move in in the first 12 months(not 100%) sure, and unfortunately live in the property for the full 12 months to receive the full stamp duty concession.

Its hard to clarify however needs to be looked into if you plan to move in to get FOHG then rent it out asap….

DOES THIS APPLY IN VICTORIA? I have purchased a property (bought land and build house) in Vic using FHOG. Lived in in for 6 months and now about to rent out as an investment property. I have obviously paid stamp duty on the land. What are my stamp duty implications now as i have only lived in it for 6 months???

Please help…