FHOG question

From: Jasmine M


Hi,

As neither my brother nor I have bought our first home yet we would be eligible for the grant. While speaking to a real estate agent yesterday, he mentioned that if we were to share the costs in buying one house we could expect to receive a total of $28 000. Is this right? My God!! I assumed that it would be one grant per one property. Have I missed a really big point here????

Many thanks,

Jasmine
(with her hopes up very high...)
 
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Reply: 1
From: Duncan M


>I assumed that it would be one
>grant per one property. Have
>I missed a really big point
>here????

One grant per property is correct.

Regards

Duncan.
 
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Reply: 2
From: Jakk Bass - The SLUM LORD


Hi all,

Seems to me that it's time for that real estate agent to go back to driving taxis.

regards
Jakk

**Hold on to your vision for the future and you'll be ready to soar when the time is right** - Sue Calwell
 
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Reply: 2.1
From: Manny B


The only way you could would get $28,000 for a property is if you purchased a subdivision potential & build 2 homes on it, one for you & one for your brother... may still be worth considering..

Manny.
 
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Reply: 3
From: Michael G


Hi,

The agent is an idiot, no offense to the other agents out there. May I suggest you read the info on the FHOG website, just checkout the State Revenue website in your state, there will be a link regarding the FHOG.

Basically if you and bro buy a house together, you will only recieve one grant.

The logic is, the grant was there to stimulate house purchases, not to stimulate buyers. That is, one grant per property, not one grant per person.

Michael G.
 
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Reply: 3.1
From: Sergey Golovin


Yep,

One property, one title, one (the first one) person on the documents (contract, FHOG application, etc.) will be eligible...

Buy two properties - one each. Do your figures and it might turn out that you do not need any money at all to purchase that property. Depends ofcourse how much you are prepared to spend (how big the property is).

They are talking in NSW State Parliament about people abusing the system - 6(?) people purchased million dollar proprieties (as first one) and claimed FHOG $7K and few claimed $7+$7K=$14K for new once. State Government blames Federal one for allowing it to happened (the grant is not means tested - any one can apply, with any income).

Also if you buy something in NSW under $175K in country and $200 metro you are 100% stamp duty exempt.

Serge.
 
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Reply: 3.1.1
From: Owen .


And don't forget Jasmine, if you buy a property with your brother you will only get one FHOG and you will be ineligible to get another one on any other properties. Even if you only have a 1% stake in the property, you will not get the grant again. If you want 2 grant you must buy separately.

Also remember that you must move into the property yourself within 12 months on purchase to be eligible. It can't be an standard IP purchase unless if you fiddle things a bit. The grant is technically for "home buyers" not investors.

Take the advise given above and read the web site for your state.
 
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Reply: 4
From: Jasmine M


Hello,

Thanks everyone. Yes, I thought it was too good to be true. Back to the drawing board...

Jasmine
 
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Reply: 5
From: Ric1 .


To take Jasmine's (ex-)agent's argument to its logical conclusion, if she and her 9 brothers went equal shares in a new property, they could expect $140 000 FHOG!

Wow, way to go!!

Ric
 
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Reply: 5.1
From: Michael G


Ric,

Place a condition on the seller to subdivide the land "x" number of times and then each subling to buy a "piece" :p

Michael G.
 
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Reply: 5.1.1
From: Sergey Golovin


You or your brother is still will be entitled to stamp duty exemptions or discounts even if you are buying your next property (alone or on brothers name).

But Owen is right once you have claimed FHOG, regardless how many people are on the list, that is it. All those people (names) will be on the system and they will never get another FHOG even if they never got one on the first place.

So, buy one for your self and one for your brother separate from each other.

If your are buying new house (NSW), let say for $180K your FHOG of $14K can be used as deposit $9K (5%) and $5K for all your conveyancing, finance, council, insurance (if required), etc.
Remember it is no stamp duty in NSW if property is under $200K metro and $175K country. You will get house for no money down at all. Canberra is $145K(?).
All you have to do is to sign the documents, wait till building is completed (or buy freshly build one) and move in.

Also please remember that grant is available only up to 31 December 2001. What will happen then? Who knows?

Serge.
 
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Reply: 5.1.1.1
From: Jasmine M


Hello,

Thanks for all the responses! Another thought concerning this, is it possible for only me to apply for the grant but purchase the property on both our names? I would like to buy it with him (greater purchasing power) but don't want to be slugged into accepting $14K between us. Is there a way to get around this?

Cheers,

Jasmine
 
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Reply: 5.1.1.1.1
From: Michael G


Jasmine,

What's your goal? what is it that you need?

If you want to co-own the property, then sorry but you forfeit any other grant available to you.

If on the other hand you wish to help your brother buy his property, then maybe you should go speak to an accountant and solicitor who are IP savy (sorry dont know any), and see if you are able to;

a) lend you brother the necessary funds to secure the deposit and purchase money

b) sign a lease or board agreement where you pay board to live in the property and thus boost your brother's income to improve his debt serviciability ratio and enable him to qualify for the loan.

You will need to discuss the impact of Defacto property entitlements (yes brother and sister do come under defacto now). You may need to draft an occupacy agreement form which waives your right to claim a % of your brother's property or visa versa.

Michael G.
 
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Reply: 5.1.1.1.1.1
From: Sergey Golovin


Jasmine,

You have to be clear on two things here.
Government does provide the grant. They are not in the business of lending money.
It does not worry them where the finance - borrowed funds (if you borrow them) come from.

However financial institutions do recognise grant as deposit in some instances and in some instances as good will if you will, complimentary to your initial deposit sort of speak.

Maybe in your circumstances person with lower income can claim the grant and person with higher income will provide funds. In that scenario you only will buy one property and claim grant once.

Other scenario is where person with higher income claims the grant and buys it first on one name and then helps to borrow money (not to claim the grant) for second person. Helps to borrow it or will become a guarantor and provide access to they equities.

You also have to show to authorities that you are living in two different places, purchased two houses.

You probably have to go to different lenders.

As they say you need good mortgage broker to sort out all those finance questions before you go any further.

Serge.

# Where are you – state, city?
 
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Reply: 5.1.1.1.1.1.1
From: Jasmine M


Hello,

Okay, I think I may have things clear now. Thank you.

We are planning to take advantage of the grant before the government decides that it can no longer support the scheme. So the idea was the get the grant and use that as our deposit, hence gaining the much-needed equity with no money down of our own.

So as we both can't get the grant and neither of us wants to use our own cash it was just a matter of using the system to our best benefit. Of course buying a cheap house (for Sydney prices anyway) is imperative. At this point our goal is getting equity in the cheapest possible manner.

hey, no complaints here anyway, a free $14000 is welcome with me any day of the week...haha!

Thanks again,

Jasmine
 
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Reply: 5.1.1.1.1.1.1.1
From: Yuch .


Hi Jasmine,

This is just my thought....you will have to seek legal advice.

The FHOG application form says, the applicant should be the owner of the property but it doesnt say that the owner of the property has to be the one taking out the home loan as well.

So the idea is, you and your brother go and buy a property together (take out the loan together)but the title goes to only one of you. The person owns the property (the one gets the title deed)gets the $14K. Now the two of you will be 'living together' in your new home for 3 months(make sure you don't 'live together' too long that you get into a defacto relationship), then the two of you go and buy another property together and this time the title goes to the other person, so the other person gets the $14K as well.

PS. You might need to have an agreement drawn between you and your brother.

Regards
yuchun
~ The secret to success is to start from scratch and keep on scratching. ~
 
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