keeping the $7000 grant

From: Jay Hunter

I am in a situation where I want to buy an IP (studio apartment) and rent it out... (I've found the studio) but I'm still renting myself and have been looking for a place to buy as a home (but to no luck as yet... little fussy I think). If I buy the ip I won't get the $7000 first home grant as I'm not going to live in it... and when I do find a place I want to buy and live in... I will not be eligible for the $7000 as I already own an IP. What a situation.

I have a LLC that I do IT consulting work through... can I buy the IP through this company and still get the 7K later when I buy my first home ?

any suggestions would be appreciated.
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Reply: 1
From: PT Bear

Interesting thing about the $7000 grant - the legislation says that you must occupy the property. It does not specify the minimum period of time for which they must live there.

Some people have found that whilst they fully intended to live there, after they've lived there for a while, they've found the home they bought doesn't meet their need or is too far from their work...
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Reply: 1.1
From: Glenn M

Hmmmm.....amazing the amount of people out there who bought places and decided to stay only a week or two as they needed to move for one reason or another.....

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Reply: 2
From: Dee Mee

From my understanding of the FHOG documentation you are still eligible for the 7k

Who is eligible for the Grant?

Anyone who can meet the following criteria:

The applicant is to be a natural person (ie not a company);
The applicant must be an Australian citizen or a permanent resident visa holder (at least one applicant on any application must meet this criteria);
The applicant or applicant’s spouse must not have received an earlier Grant;
The applicant or applicant’s spouse must not have previously owned residential property anywhere in Australia prior to 1 July; and
All applicants must live in the property within 12 months from the completion of the eligible transaction.

from the above - if you own IP purchased after 1st july 2000, you can still get the grant if you buy a house you live in.

Please correct me if i am wrong

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Reply: 2.1
From: Kevin Forster

If you purchase an IP, it is classed as residential property so you won't get the grant. If you had commercial and industrial property prior to buying your house, I'm not sure if you still qualify for the grant.

The only concern that I would have with buying a house and staying in it for a short time then moving out is if the government decides on an audit of the scheme. It could be deemed as defrauding the government which at minimum would demand the repayment of $7,000.

If you think that won't happen then look at some of those primary production taxation schemes that had their allowable deductions cancelled a few years later and the investors had to repay all their tax deductions.

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Reply: 2.2
From: Jay Hunter

Thanks for you reply's...

I called the first home owner grant hotline... and they said the same as Dee Mee. I can buy an IP as long as I don't live in it I can still get the 7kwhen I buy a place to live in.

I'm going to send an email to them and get a response in writing.

thanks again.
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