Hi there,
Thanks in advance for your help.
My partner and I are lucky enough to be renting from relatives in the inner city (and want to continue to do so) but are hoping to buy where we can afford – ie futher out!
We are in the initial stages of home loan application and are confident financially we will be fine paying off a morgage (plus our existing rent).
My question is, does it make more sense financially to move to this new home to receive the first home owners grant – or can similar saving be made by claiming investment property interest payments as a tax write off? The house needs some work and our initial idea was to move there, do it up over a year (and receive the grant) then move back to our rental property, and rent out this purchased home at a higher value than what we would receive now.
Basic figures are – current rent $1500 per month; new home $200 000 loan (buying for $250k or so).I am very clueless at the moment and appreciate the experienced and wise with their comments and feedback on these options!
Thank you
JessHello Jess,
Very interesting………..
You can always get your FHOG later if you opted to purchase your PPOR in the future? But, its a lot to do with your investment strategy. For instance if you intend to invest for Growth (provided you invested in area where the CG for average of 10 years is 8% or above), then it makes good business decision to apply for FHOG towards your PPOR then hold on to it until you are ready to move back rent market (at least 12 months). That way, the increased of CG will help to fund your deposit towards your 2nd IP in the future (revalue the PPOR, then if sufficient refinance to draw down the increased of equity to fund for deposit). That way, you can have your cake and eat it too.
Good luck
Cheers Leo
Great comment Leo,
Jessr, in addition to the First Home Buyers Grant, theres also significant stamp duty concessions and savings to be made by purchasing as a First Home Buyer rather than an investor – can potentially save you around $5000 – $6000 depending upon your state. Add that to your grant, and you could be around $10,000 – $12,000, if not more, initially by purchasing as a First Home Owner.
Is that sort of $ saved going to help you potentially get into a 2nd property sooner if thats your plan?
Do some further investigations on your states Office of State Revenue website. These sites can be REALLY confusing so dont be afraid to ring them (even if you have to typically wait on hold for hours) with a list of questions.
Nicole Marsh
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