Some of you may already know my plans to buy a run down house and do it up over 6 months to claim the FHOG and also CGT exemption for 6 years(i may want to sell it down the track). Over this period i will be paying alot of interest on the investment and non of it wil be tax deductable, because it will be my PPOR. I read in another thread just then about how the 12 months for the CGT discount applies from the date contracts are done and not settlement. Now settlement is where my debt will begin and i will have the deposity and the buying costs all good. So does the 6 months of owning the property(and sayign that its my PPOR) start at settlement or on contracts day??? Becuase If it was contracts then i could organise a long settlement like 3-4 months and then only need to be in there for 2-3 months paying interest, it may save me thousands in interest. What does everyone think of this? Will it work?(provided I can find a vendor willing to agree to a long settlement).
Yours Sincerely,
Christopher Fife.Don't confuse CGT and FHOG requirements. FHOG requires 6 month's residence:
"
First home owners grant
To be eligible for the federal government’s First Home Owners Grant scheme you must be an Australian citizen or permanent resident and you (and your spouse / partner) must have not previously owned a home in Australia.
The grant amount varies from state to state. In NSW, QLD, and the ACT it is currently $7,000. In VIC you can claim up to $10,000 ie an extra $3,000 is claimable in certain situations however stamp duty exemptions are not as favourable as some other states.
The government gives you the First Home Owners Grant in the form of cash to add to your deposit and this is usually paid at the time of property settlement. The property you buy must be an owner occupied property and new legislation introduced on 1 Jul 2004 requires you live in the property for a period of at least 6 consecutive months commencing within the first 12 months after purchase. Therefore, there is some flexibility in complying with this legislation and you still may qualify if you
- decide not to live in the property straight away or alternatively
- live in it for six or more months and then rent it out following that. "
Thank you for your response Crj.
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