Hi,
New to the site, and my wife and I found this site so we could better improve our knowledge and learn from others.
I currently have an investment property in my name that I purchased before I got married. Never lived in the property, and rented it out immediately. After getting married. my wife and I were looking at buying a property together. She has never purchased a property before.
Are we eligible for the FHOG considering it would be our primary residence? How long do we need to live here before renting it out and converting to an Investment property? Are there any other costs/considerations that need to be looked into?
Additional information,
IP1 valued at $450K, owe $301K
Interest Only Loan
30K in savingsAre we able to access the usable equity from IP1 and savings to use as a deposit for the PPOR.. then turn that into an IP2?
Sorry for the many questions, but like to clear this up in our minds
Many thanks,
J&JHi J & J
Firstly welcome to the forum and i hope you enjoy your time with us.
To answer your first question yes as long as neither of you have occupied this or another owned property as your principal place then you would be entitled to claim the FHOG. Claiming the concessional Stamp Duty depending in which State you are located maybe a separate matter.
The FHOG requires you to reside in the property for a continous period of 6 months commencing within the first 12 months of ownership so if the property is tenanted it gives you the flexibilty to end the Tenants lease and then move in.
Certainly you are able to access the equity in the current IP and use the funds as deposit and to ocver the acqusition costs but remember you want to be slightly careful in how you do this as the interest on the sub loan and PPOR loan will only be deductible once the property becomes available for rent so you dont want to contaminate the interest on the original IP.
Also remember the Title is what decides the deductibility of the interest and not whose name the loans are in.
You may need for servicing to have the sub loan on IP1 in Joint names and then in turn lend it to the 2 of you at the same rate and terms etc but your mortgage broker will be able to suggest the most effective way.
Might be an idea to restructure the loan initially so you are ready to go once you locate a suitable PPOR.
Any other questions pleased ask.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
jyon wrote:I currently have an investment property in my name that I purchased before I got married. Never lived in the property, and rented it out immediately. After getting married. my wife and I were looking at buying a property together. She has never purchased a property before.
Are we eligible for the FHOG considering it would be our primary residence?
HI,
As already mentioned, it does not make you ineligible for the FHOG as long as you have not lived in it. But in some state there is a time condition – for eg if NSW or VIC it does not matter if you lived in it or not – If you have had an interest in any property – investment or otherwise, and it was purchased prior to the year 2000 (July from memory) you are not eligible for the grant regardless..
Cheers
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