All Topics / Help Needed! / First Property – How Do People Get The FHOG When They Dont Live In It?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of sarahj1988sarahj1988
    Member
    @sarahj1988
    Join Date: 2011
    Post Count: 2

    Hi guys,

    Is it legal to buy a property as my principle place of residence but have people living with me and paying rent directly to me. Would I still receive the FHOG?

    And how do people get away with receiving the FHOG and they don't even live there??

    Profile photo of Tassie developTassie develop
    Member
    @tassie-develop
    Join Date: 2011
    Post Count: 2

    Hi Sarah,

    My understanding is that receiving rent would not be legal even if you were living there. Technically this makes a proportion of your house an investment and thus a proportion is subject to CGT, etc. Obviously plenty of people must have done this and received "Cash in hand" no receipts…. But i think you could still get done if caught.
    As for getting the FHOG and not living there…. If you have bills going to the address whos to say you aren't living there…. until the new ATO super computer catches up with you.

    Probably better to do things (mostly) by the book. <moderator: delete language> you can't get FHOG for an investment place; typical Australian punishment for trying to get ahead and be smart about things.

    Good luck,
    Tassie

    Profile photo of CatalystCatalyst
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    @catalyst
    Join Date: 2008
    Post Count: 1,404
    sarahj1988 wrote:
    Hi guys,

    Is it legal to buy a property as my principle place of residence but have people living with me and paying rent directly to me. Would I still receive the FHOG?

    If you live there it is your PPOR. If you have boarders it's up to you (legally you should declare it). So it's not really rent as in you wouldn't have a rental agreement, but maybe a shared housing agreement.

    sarahj1988 wrote:
    And how do people get away with receiving the FHOG and they don't even live there??

    Well lot's don't. There have been a lot of cases investigated. Some live there for the 6 months. Some that just buy and don't live there and wait for the 6 months to be up have been caught because there is a VERY low electricity bill. Be careful.
    I guess some get away with it though.

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    Catalyst wrote:
    Well lot's don't. There have been a lot of cases investigated.

    Like this one recently – https://www.propertyinvesting.com/forums/property-investing/help-needed/4337779

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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

    Of course it is legal to have someone pay you rent for your PPOR. Whether you can still get the FHOG is a different matter, but without looking into it I would think it could be possible if you are still living there for at least 6 months.

    Tax is a separate issue to consider and you would lose the CGT exemption on part of the property possibly

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of colinnewlandcolinnewland
    Participant
    @colinnewland
    Join Date: 2006
    Post Count: 128

    It is legal to have a boarder/house mate/friend in your house who makes a 'contribution' to household expenses (power, water, gas, interest, renting furniture, wear and tear of equipment etc).  You both decide what is fair.

    As for the ATO, cost sharing/recovery should not be defined as income nor should it affect your CGT exemption.

    It should not affect your FHOG either as long as YOU occupy the property for at least 6 continuous months, starting within 12 months of settlement/completion.

Viewing 6 posts - 1 through 6 (of 6 total)

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