FHOG question

[winki]

Hi guys,
I bought a unit 3 months ago and received the first home owners grant. I've been renovating the unit the entire time and have not been living there.
Once the unit is finished being renovated (in about 3-6 months time), I'm hoping to rent it out.
My question is......
Once I'm finished renovating, do I have to live in it for 6 months before renting it out?
Do I have to prove that I've been living there?
Thanks for any assistance

[XBenX]

Winki - why dont you change over the services, electoral role, drivers licence, etc.

To your units address...

"Live" there whilst renovating

[Aceyducey]

Winki,

By law you must live in the premise at some point.

Refer to: http://www.firsthome.gov.au/ for the broad outline (slight variations by state but same theme).

Note that you've just posted in this public forum that you had the intention of breaking the law.

I suggest you rethink your intentions and plan on living in the property for a period of time.

Cheers,

Aceyducey

[winki]

Is there a difference between me physically living/sleeping there or just going there nights/weekends to renovate?
Either way I'm not renting it out to anyone.
Does the 6 month period start from settlement or once you're actually sleeping there? How can they prove this?
I'm not saying that I'm intentionally trying to break the law. I'll live there for 6 months if I have to, but I'm curious as to when the 6 month period actually starts.

[Aceyducey]

winki,

How can YOU prove you are living there?

The burden of proof is on you not on the government.

XBen has given you some clues on how to prove that you are living there. Electoral role helps as well.

The 6 month period starts from when you can prove that it became your place of residence.

Cheers,

Aceyducey

[JamesGG]

Just as an aside to this, for those who might be interested; the Victorian state govt have extended the $5k FHOB until the end of December (was until the end of June).

Back on topic: Winki - You need to be living there; if you have your principle place of residence elsewhere, then that's not going to work. You need to live there for at least 6 months, and that must start within the first year of ownership.

If it's going to take 6 months to finish it, then I would suggest you move in right away...

Regards,

James.

[wish-ga]

Within 12 months of settlement of property (as per the link Acey supplied you with)

Honesty is free, peace of mind is priceless. I don't know how often they challenge anyone but for the sake of $7,000 why bother trying to stretch their leniency... the FHOG is a such a gift.

If it has enabled you to do some reno so you are ahead even if you do have to live in it for a SHORT time (let's face it time flies, just last week is was New Years wasn't it?) ;)

[pulse]

A friend of mine was sent a letter saying that the government had evidence that his property was not his PPOR. They offered him the chance to pay it back with a few thousand dollar fine or take the risk in court. He paid the fine.

It needs to be your PPOR for 6 months continuously within the first 12 months. You can apply for an extension if building runs late I think. As to the definition of PPOR, they won't actually know if you slept there but they will know if you have another property somewhere that you claim as a PPOR or have mail sent to.

Also at the 12 month mark, they ask fo evidence, 2 bills either phone, power, gas as well as RTA change of address. Water ar rates are no good. You need to send all you mail there ASAP.

I got quite a shock when I had to go through everything to find a bill. Luckily I had a power bill and post office redirection receipt.

Cheers
Pulse

[caramellokoala]

I don't recall where I read or heard about this but a single guy was taken to court recently, in past six months, to repay his FHOG for reasons similar to yours.

I will do some searching so I can give you the facts.

Cheers.

CK

[Amarantha]

Just as an aside to this, for those who might be interested; the Victorian state govt have extended the $5k FHOB until the end of December (was until the end of June).

Ooo, thanks for this :) I didn't even know the bonus existed. I thought it was the $7k grant that was ending in June (we're hoping to buy PPOR in the next couple of months).

[Panda]

Hi Winki,
I agree with everyone else. 6 months etc. Take it seriously and be honest. One a side note there may be another option open.

If you have honestly not been living in the property and you have renovated it then maybe you could look into
a. Get a revaluation
b. If the reval comes in good then be honest and tell the government that you have not been living there. You might have enough in you reval to leap frog into another investment.
c. Give the FHOG back to the government. Check with them to make sure that you will still be eligible for it in the future though.
d. If all the above fails live in the property for the amount of time that the government wants and provide proper evidence to them. Keep the FHOG and then rent the property out.


On point c. The FHOG allows a person to own as many INVESTMENT properties as they want and as long as those properties are not you PPR. then you are still eligible for the FHOG when you buy your first home to live in.

Section 14 (4) of the Act provides that an applicant is eligible for the grant if the applicant or the applicant's spouse has, on or after 01 July2000, held a relevant interest in residential property in Australia, which was not used at any time as the residence of the applicant or the applicant’s spouse.


Could this be an option for you?

Obviously go and speak with a professional accountant or financial advisor who is authorised to provide advice about this sort of thing. Any of what I’m saying is no way advice to you or anyone in any way shape or form. I am not authorised or experienced to give advice.

Cheers,
Panda