First home buyers grant loss

Discussion in 'Legal Issues' started by fusion9, 31st Mar, 2015.

  1. fusion9

    fusion9 Member

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    Hi guys,

    I've read tons about this but still not sure about one fine detail - what is it, exactly, that makes you lose this grant?

    I am in a position where i need to help mum take out a loan to buy either persons first property. The loan will be under both our names. In doing this, have I now given up my chance at the grant, or can the property papers be signed exclusively under her name (or vice vesa)?
     
  2. spludgey

    spludgey Member

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    You can go guarantor, that way you don't lose your first home status and don't necessarily have to live in the property either.

    The title would obviously then be in her name only.
     
  3. travelbug

    travelbug Member

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    At the moment the rules are that you can own an investment property (as long as you haven't resided in it) and still get the first home owners grant. As you know rules can change though.
    So if you are not intending on living in it you can still get the grant later.

    Do you mean lose it as in have to pay it back? People have been asked to pay it back because they lied and said they were living in the home they bought to live in, and weren't.
     
  4. fusion9

    fusion9 Member

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    Is the guarantor part dependent on the loan, or the contract/title of the property?
    Happy to leave it in her name alone.


    I will be living in it for the short term.

    I mean losing the opportunity of the grant by the above loan. The bulk of my deposit savings will be gone, thus the only 2 options I will have are:

    - buy off the plan for the grant (assuming i don't lose it due to above)
    - use the property above as equity
     
  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    Lenders won't accept a guarantor to another person for affordability purposes. This doesn't work. You'd have to be on the title which means you'd miss out on the grant.
     
  6. fusion9

    fusion9 Member

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    Yeah that's what I thought. Looks like I have no way around this.
     
  7. sumterrence

    sumterrence Member

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    Is it just your mum paying for the property or both of you will be contributing in terms of deposits and repayments?

    A lot of families that have cash and would also like to receive age pensions, will usually want to buy/transfer assets under their child's name so when the parents do asset test they look poor. which makes them eligible for age pension.

    This is not entirely ethical but it's a loophole, anyways, if my above hypothesis is true, you might want to speak to a creative accountant about the pros/cons of doing this as when it comes time to sell the asset or if you wanting to buy your own one for yourself, you might failed serviceability because you're tied to this loan with your mum which technically it's hers....

    And if this property is under her name as residential property (she can own 1 residential property and still eligible for age pension) I believe you will also lose the benefits of an investment property such as depreciation and expenses on bills etc?

    If it is totally not what I've mentioned above please move on and disregard :eek:
     
  8. fusion9

    fusion9 Member

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    sumterrence, you are right on the mark.
    She is close to retirement age and once that happens, will lumpsum a large portion of the super into the property for that very reason.

    I am only contributing as due to age etc, she cannot get enough of a loan, or foot the the deposit in entirety now. So I will be contributing both.

    Ethical or not, in the situation we are in with people making truckloads off multiple IPs and gearing, I have not an inch of guilt.

    Honestly the financial super advisor she had, and paid 3k for, was incompetent and kept giving incorrect information so any ideas would be appreciated.
     
  9. wylie

    wylie Member

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    Can you get a personal loan to help her and not be on title?
     
  10. skater

    skater Capitalist

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    You can get a joint loan & not be on the Title.
     
  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    If you're married, in a defacto relationship or purchasing via a trust. I have seen situations where people weren't on the title outside of this, but it's not an exception I'd rely on.
     
  12. skater

    skater Capitalist

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    Fair enough.
     
  13. fusion9

    fusion9 Member

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    The 'not living in it part' - does that mean if the off the plan building takes 1.5 years to build, you cannot live in your 'IP' till that date?