All Topics / Help Needed! / EQUITY ???

Viewing 15 posts - 21 through 35 (of 35 total)
  • Profile photo of PropertyGuruPropertyGuru
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    @propertyguru
    Join Date: 2003
    Post Count: 1,502

    You Have to be in your PPOR for 6 months to claim FHOG. this 6 month period can be any time between first year since the date of settlement.

    Cheers
    PropertyGuRu [sultan]
    Mortgage Consultant
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    NZ loans and pre approval from 7.99%

    Profile photo of Bradles CBradles C
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    @bradles-c
    Join Date: 2004
    Post Count: 52

    Thanks guys,

    Not planning on doing a ‘dodgy’ !!! Just curious to find out what my options are to get renters in ASAP so I can start paying off my mortgage !

    Is it legal to receive rent for your PPOR while you are still living there (in the first 6 months) ? ie : my partner will advertise for 1 or 2 housemates to rent while he lives in the same house ???

    Has anyone else got some ideas ???

    Profile photo of richmondrichmond
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    @richmond
    Join Date: 2003
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    I think it’s legal to charge rent while you’re still living there… but bear in mind the CGT implications due to income received… an accountant would be better to advise on this.

    As long as you ARE actually living there, there should be no effects on the FHOG (but I’m not an accountant)

    Cheers
    r

    Profile photo of MJTMJT
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    @mjt
    Join Date: 2004
    Post Count: 80

    M brother bought his first house using the FHOG while still living with mum and dad. He occupied a room downstairs ( mainly for his tools for renovating) where he sometimes slept. He chaged his mailing address to this place for 6 months to satisfy the FHOG. He managed this IP himself.

    Matt

    Profile photo of kpkp
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    @kp
    Join Date: 2004
    Post Count: 509

    There was a news article recently of a guy who had the grant rescinded because he was deemed to be still living with his parents….because he had every meal there ( parents house) and his electricity bill was too low….be careful, its not worth getting caught…

    KP

    Profile photo of clare kclare k
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    @clare-k
    Join Date: 2003
    Post Count: 11

    Hello everyone,

    If you are buying a property that you will get the FHOG for, you would be purchasing as an owner occupied loan and so would not be able to claim the interest on your loan. That is my understanding.
    Also can do up to 95% dependant on what you determine the additional funds are for. LMI applies.

    Cheers
    Clare
    [email protected]
    0409 413 758

    Profile photo of richmondrichmond
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    @richmond
    Join Date: 2003
    Post Count: 831

    I just hope that ALL and sundry who try and obviously rip off the FHOG get caught and are made to pay the money back… just another version of bludging IMHO…

    For those that need it and use it properly (even if they live in it for the first 6 months) I don’t have any issue at all.

    Cheers
    r

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi

    What sort of loan you have has no bearing on whether you can claim the interest or not. I would think if you get the FHOG, you could still rent out some rooms and claim a portion of every cost, including interest and depreciation BUT you may end up paying CGT when you sell.

    Maybe the perion involved could rent out some rooms for 6 months while living there to legally qualify for the FHOG and to then move out and rent it completely as an IP. But there are also large CGT implications here too, because if he/she lived in it for 6 months intially as their main home and then rented it, they could still calim it as their main home for a period of 6 years while renting it out. So if they sold dduring this period, there should be not CGT. Having only a portion of it as you main residence, may mean only that portion is able to be claimed as their main residence during this period.

    Better talk to an accountant about this before you do anything.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Bradles CBradles C
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    @bradles-c
    Join Date: 2004
    Post Count: 52

    Fantastic feedback guys, I really appreciate it !

    I agree with Richmond, it is not worth doing a dodgy on the FHOG and that is why I am asking these questions to find out what is legal in terms of renting your PPOR !

    Correct me if I am wrong but is it possible for us to buy a house in my friends name, claim the FHOG, live in and renovate for 6 months as PPOR, rent out property, friend moves back in with parents, sell property after 12 – 18 months and pay no capital gains ???

    This sounds too good to be true ?

    Profile photo of richmondrichmond
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    @richmond
    Join Date: 2003
    Post Count: 831

    In that case, it is good AND true… as long as your friend doesn’t buy another PPOR in the mean time, the first one remains CGT free (for 6 years I think)

    Profile photo of kpkp
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    @kp
    Join Date: 2004
    Post Count: 509

    Interesting point you raise Terry.
    thats thinking outside the square.
    Its all a question of apportionment.
    You are still living in the place thus PPOR, but you are deriving income by renting out rooms…BRILLIANT !!

    Profile photo of MJTMJT
    Member
    @mjt
    Join Date: 2004
    Post Count: 80

    What is wrong with owning a house that you occupy, say, 10% of and rent the other 90% to tenants. The FHOG is helping you buy that room.

    The FHOG was intended to help people buy their own home. If you can substanciate that you lived there, bed/matteres, personal stuff and mail why would they question? [strum] Or is there a secret FHOG police force I haven’t heard of?

    If you were 18 and wanted to buy your first home aswell, just like everyone else, and the Gov introducted a scheme to help people so that, wouldn’t you try to qualify??

    I don’t mean blatently cheating but satisfying the rules to suit yourself.[biggrin]

    It gave my brother a good start and he has used it to its fullest.

    Matt

    Profile photo of MJTMJT
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    @mjt
    Join Date: 2004
    Post Count: 80

    I forgot to mention that I agree with you Terry. This IS what my brother did. And yes I think he did pay a bit of tax. But the property was way positive… helped pay for his next one.

    [medieval]

    Matt

    Profile photo of calvin_thirty4calvin_thirty4
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    @calvin_thirty4
    Join Date: 2004
    Post Count: 556

    Hi all,
    I had looked into this, with a lot of help, but in the context of buying a douplex on a SINGLE title. See below
    https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=11097

    In this situation it was deemed to be legal.

    Cheers

    C@34

    Profile photo of Bradles CBradles C
    Participant
    @bradles-c
    Join Date: 2004
    Post Count: 52

    What a great response, thanks guys [thumbsupanim]

    Surely this is a smart way to get started in property investing !

    Buy a house in need of renovations, claim FHOG, live in and renovate for 6 months, move out and rent property to tenants while living / renting somewhere else. In the right location this would surely be cashflow positive after the renovations and FHOG ! Renovations will increase the rental potential and the $12,000 will result in less mortgage and therefore less interest to be paid !

    Is anybody else using this strategy to purchase their first IP ? Are there any negatives to this approach ?

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