Can anybody tell me how long you have to live in a house before you don’t have to give the FHOG back?? My kids want to by a positive geared house, depending on how long they have to live in it before they start renting it out.
There is no official time limit. 3 months usually is a rule of thumb. 6 months is better.
Just need to keep the bills in their names.Hi all,
I have another question regarding FHOG. The properties that my kids are looking at are in a place where they may not be able to move into. More likely that they wouldn’t then they would. If you receive FHOG and then later on let them know that you are not going to be able to move in due to circumstances, do you only have to pay back FHOG, or is there e penalty?
It could be a way to get into investors market. Would it be ethical??
The Australian Government has a site dedicated to information on FHOG. A search on Google.com.au will bring you to the site. The official stand is that you must live in it for 12 months before you can flick it on to investment. If you rent up front then you will be required to pay back FHOG and donate a substantial penalty. One possibility is that the recipient of FHOG lives in the property and rents rooms out to friends. Good luck to the kids. Trying to do the same for mine.
Hi,
I’ve been criticised for this view before, but it’s just my opinion, so just because it’s different to some doesn’t make it wrong.
I think it’s unethical to use the FHOG if you don’t intend to live in the place… that’s not what it’s intended for, and if you’re willing to take the risk of incurring penalties when you’re caught, that’s your choice. Going off topic a bit, I also think it’s ridiculous that people buying properties worth $1-2 million can get the grant… what a joke. The legislation should have been thought through a lot better.
On the one hand we’ve got people criticising the way our taxes are spent, then on the other we’ve got people who are willing to pull shifties to get something out of the government… it’s quite a polarising discussion.
By the way, I think it’s great that you’re trying to help your kids, I just don’t think this is the way to do it unless they’re going to live in it (at least for a while).
cheers
rJust one thing I would like to clear up. If kids purchase and decide they don’t want to move in (they possibly will move in, but not 100%), we would advise FHOG of this, not wait to get caught. Would there still be a penalty under these circumstances and do you still think this is unethical??
I know of a young man that received $14,000 FHOG for a property that he never intended to live in. He has received rent for the last 18 months and has never been questioned even though he doesn’t live anywhere near the property. Bet if either of my kids, who have been brought up to be honest, tried anything like that they’d be the first caught. My oldest son received the $14,000 and paid cash for an $18,000 block of land in a town an hour out of Perth, borrowed for the building, the town went through a mini boom and he is now sitting in a $170,000 house with a $74,000 mortgage. His girlfriend has just bought a house at age 21 after saving $45,000 by working at Chicken Treat part time while at school and full time for the past two years. Hope your kids are able to take advantage of the FHOG while it is available but let them do it legal and be proud of what they have achieved.
Wow Judith, that’s really good stuff from your oldest son… good on him!
steveod:
If kids purchase and decide they don’t want to move in (they possibly will move in, but not 100%), we would advise FHOG of this, not wait to get caught. Would there still be a penalty under these circumstances and do you still think this is unethical??
I think if you advise FHOG of this you wouldn’t get in too much strife because you’re being honest, and that’s the key, but I’m sure there’s government departments that could answer your question properly.
By the way, I only think it’s unethical if people use the FHOG to buy places that they never intend to live in. People no doubt do it thinking they’re clever ripping off the government and claim they “deserve” the money, but I don’t think that’s right, ethically or otherwise. Maybe I’m jsut being idealistic.
Cheers mate
Hi guys
an extract from the NSW Department of State Revenue.
Please consider your options very carefully as any profit you think you are making can easily be eroded with the stroke of a pen.
Penalties
Q: What are the penalties for providing false or misleading information?
There are substantial penalties for making false or misleading statements in, or in connection with, an application.The Office of State Revenue, as part of its role in administering the First Home Owner Grant Act 2000, conducts investigations and compliance checks to ensure applicants are entitled to receive the grant. A penalty of up to $11,000 may be imposed for knowingly making a false or misleading statement in, or in connection with, an application.
In addition, the Chief Commissioner of State Revenue can, as a result of an applicant’s dishonesty, also require the applicant to repay the grant and impose a further penalty equal to the value of the grant paid.
Regards
Papajoe
I was speaking to a broker the other day about using the FHOG as part payment for an investment property. He was saying to me that the “bank” will not accept this on an investment property. However, I could apply for the FOHG after I had made the purchase as long as I was intending on moving into the property within 12 months of the purchase.
So if this is true you would have to have the deposit and closing amounts to go through with the purchase anyway.
About the ethics part, in my opinion it would not be unethical to use this money to buy a property if you were not completely sure that you were going to live in it, but it would be wrong to not give the money back if you did not move in after the 12 months. Also, I dont think dishonesty is a very good wealth building strategy, it would probably end up costing more than its worth.
The regulations with FHOG definately need to be tightened.
Apparently, heaps of overseas investors are claiming it as well.
Who voted in our Govt????
Del
Many from New Zealand in particular have been recipients of the FHOG but I understand this loophole has been plugged.
Thanks Judith,
I’m glad to hear that. I hope the FHOG is means tested soon. At the moment it’s just a big joke on the Gov’t.
Del
Hi Del,
It’s not just a joke on the government, by extension it’s a joke on us, cos we’re the suckers paying for these people via our taxes… that’s what gets me angry.[
!]Cheers
rHey Richo,
You’re right.
FHOG wasn’t around when I struggled to buy my first home.
It REALLY makes me angry that millions of OUR dollars are being wasted, when so many young people in our society are homeless and living on the streets, and our hospitals are financially up sh*t creek! There has got to be something done.
Richmond for President! ha…ha..[
]Del
hi steveod, i don’t think you will get penalised if you inform them after. you may have to pay interest though (not entirely sure). the rules for each state slightly differ. in nsw you don’t have to live in it for 12 months before you get it. and if you do get an investment loan and claim the grant – chances are you will have to do a lot of explaining sometime down the track. On another note, I do personally believe that the grant should be means tested. Not on a salary basis but by the amount of the property. Maybe say over $600,000 they shouldn’t be entitled to the grant. Or a sliding scale. I am from Sydney so I didn’t want to make the amount to small as the property prices here are $$$$$
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