$7,000 grant & renting for 11 mths

[wish-ga]

I read last night that it was possible to take advantage of the first home owners grant and still rent the property for 11 months. Any knowledge of this?

I am about to buy owner/occ to live in and thought that renting it for the first 11 months or so would help me pay it off asap so I can start building a portfolio.

I realise most people here are beyond this stage but maybe you have advised a newbie like me.

thanks in advance for your time

 

[mckennal]

I assume you are talking about WA?
I think you are correct about renting out for the first 11 months. The stipulation with the FHOG is that you have to move in within the first 12 months.

Just call the OSR and ask to speak to the FHOG department. They are really helpful and will have your answers on hand.

Good luck.
Luke

PS: something to be ware of, is that you will be hit with some pro-rata'd CG tax when you sell if it is rented for a while _before_ you move in.

 

[Jamie]

Hi wish-ga,

This is indeed the case, but there are a couple of rules you must follow to preserve the status of the property as your Principal Place of Residence.

Q: When do I have to take up occupancy?
At least one applicant must take up occupation of the home as their principal place of residence within 12 months of settlement or completion of construction.

Q: Is it possible to rent the home out before I move in?
You may rent out the property before you move in, provided that you occupy the home as your principal place of residence within the specified 12 months.

You can rent out the property prior to moving in, but you must move into the property within 12 months - so in your case 11 months is fine.

Q: How long must I reside in the property to establish it is my principal place of residence?
Effective from the 1 January 2004 an applicant must occupy the home for 6 continuous months commencing within 12 months of settlement or completion of the home. The onus is on the applicant to prove that they have lived in the property as their principal place of residence, if requested by the Office of state Revenue.

Once you move into the property (within the 12 month period) you must live there continuously for at least 6 months. It is no longer possible to move in for a couple of weeks and claim it as a PPOR, as might previously have been the case.

http://www.osr.nsw.gov.au/portal/page?_pageid=33,63454&_dad=portal&_schema=OSRPTLT

All the best,

Jamie.

Edit: I used the NSW OSR site as wish-ga is situated in Sydney.

 

[wish-ga]

Have been to the site and printed off some info.

Great help...thanks to both of you.