Hi All,
Im a 23yo single and looking at making my first step into the property game. Over the last couple of years I have thought that my plan, once I have saved my deposit would be to buy a inner city (Sydney) apartment with the help of the FHBG.
With the cost of property at the moment I wouldn’t really be getting too far paying off a substantial mortgage on my own and it would be quiet a few years before I have enough equity to start investing.
After reading a number of books and looking at various other resources over the last couple of weeks I am now thinking that I may be better off for-going the government grants and buying an investment property first. The interest that I could claim as a deduction (42% tax bracket) would match if not exceed my FHBG in 3-4 years and (if I can find a +CF property) allow me to continue building my portfolio from day one. The rent I am paying at the moment is only $100 as I am sharing with so friends so buying to save on rent is not my aim.
Am I stupid to give up a free $15 – 20 grand from the government or I would be better off going for the longer term investment property first?
Pete
What about buying to live in first (maybe rent out a spare bedroom), get the grant and establish this property as your PPOR. You will then be able to rent the place out and claim all deductions and still be exempt for up to 6 years from CGT. You can get your cake and eat it too!
Terryw
Discover Home Loans
Parramatta
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Sound like a good solution Terry. I missed out on the FHOG because the first place I bought was an IP and it still hurts me. Have to think if the government is going to give you money to buy a property then “grab that cash with both hands and make a stash” – some old Pink Floyd lyrics there – ok i’m showing my age!
I bought 2 investment properties (post July 2000) and was still able to apply for the FHOG for my third ppr purchase. I read the fine print and found out that a few years after they introduced the scheme they changed the wording to ” applicants must not have previously purchased and occupied residential property in Australia, as a place of residence on or after July 2000.”
It should still be the same now. I purchased in WA but should be the same for all other states. Check with your office of state revenue.
Originally posted by reidpg:Sound like a good solution Terry. I missed out on the FHOG because the first place I bought was an IP and it still hurts me. Have to think if the government is going to give you money to buy a property then “grab that cash with both hands and make a stash” – some old Pink Floyd lyrics there – ok i’m showing my age!
when did you buy it mate?
Simon Macks
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0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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