Move to block first-home toddlers

I wonder what names goes on the title
and if it is the parents name whether this is
fraud or not????
also who does the bank loan the money to???
 
A can of worms!

Assuming the grant is still around in 20 years time when the kids might geuninely want to buy, won't they be ineligible (same person can't claim twice)?

Effectively the parent is taking potential future benefits from the kid, so isn't it greedy on the parents part?

But the kid might not know that they 'applied' before when they were a baby.

Because the kid was a minor, does this make him incapable of signing or being liable for contracts?

And would this exempt them from being charged with making a false declaration, as they were too young to sign first time around?

Peter
 
I wondered that myself Spiderman. I would guess that the houses are held in some sort of trust for the child so that when the child comes of age they own the house in their own name and can do with it what they want.

There are definately some serious legal implications involved which may lead to children sueing parents at a point in the future.

Nat:)
 
Originally posted by natmarie73
I wondered that myself Spiderman. I would guess that the houses are held in some sort of trust for the child so that when the child comes of age they own the house in their own name and can do with it what they want.

There are definately some serious legal implications involved which may lead to children sueing parents at a point in the future.

Nat:)
Click to expand...

I infer that it may be possible for a trust's first purchase to get the FHOG? Or does the govt look at the overall picture, eg, me as a director of a corp trustee having owned a house before -> trust not eligible for FHOG. In that scenario, could one play a merry go round of trustees?

Just curious?

C
 
I heard about this on the TV news last night, and the wording was something like Victoria to follow NSW lead in closing the loophole .

Does this mean that the other states still allow this to happen ?

I am curious about this as I was trying to buy a property in my daughters name a year ago, in QLD, and was told that it couldn't be done until she was 18. And I hadn't even considered the FHOG, :)

From what I have read on this forum, I get the feeling that I could have done it by using some from of trust. But even my solicitor didn't mention that.
 
I got part of my answer on the 6 oclock news.

47 Qld's under 16 got the grant, ( 4 of them under 12 months old)with about another 50 being 16 or 17.

What still puzzles me is how they got it, when an under 18 cannot even own a property ! :confused:
 
abcd wrote:

'What still puzzles me is how they got it, when an under 18 cannot even own a property !'

Are you sure? After all people under 18 get married & start work full time, etc, so I can't see why not.

Also Anita Bell (author of 'Your Investment Property') claims to have bought her first property at age 16 (page 158).

Hey, maybe we could start another thread on 'youngest property investor'!

Peter
 
If you do a search we've discussed the minimum age a minor may purchase real estate in various states.

The net effect is the parents go on the title on behalf of the minor (from memory).

Folks, remember this is closing a loophole. Which means the drafters of the FHOG legislation/regulations for the various state governments were sloppy.

They were perfectly legal but unintended consequences of the wording.

Stamp Duty is payable on all conveyances of real property in NSW for decades. But the loophole allowing duty free transfers was closed in 1997. ;)

Having said that which would you prefer? $7K for your toddler today and a property, or whatever assistance some future government may deem to offer.

The Net Present Value of $7,000 and 18 years of capital growth will exceed any grant in the future.

Regards

Paulzag
Dreamspinner
 
Peter

I am not sure at all now, but I was told by a solicitor that I couldn't buy a property in the name of a minor. :confused:

I feel that they should be able to buy property at least from the age of 16.

I think I will try to find out more about this tomorrow.
 
Legislation closes first home owners’ loophole

Friday 17 October 2003

Legislation closes first home owners’ loophole
This week, the Victorian government was the first of the states and territories to introduce new legislation to close a loop hole in the first home owners’ scheme which had allowed parents to buy properties in their children’s’ names in order to qualify for the grant.

http://www.propertyinsider.com.au/echo/external/WebTemplate.cfm?clientid=49&fullstory=920&periodid=133

Jamie.
 
Correct me if I am wrong Jamie, but my understanding of that article you posted is that the loophole still exists on other jurisdictions.

And here I was about to give the Victorian Government a blast for their 2nd rate legislative drafting skills!

Seems they are one step ahead of a very slow pack.

MB
 
Originally posted by Pitt St
Correct me if I am wrong Jamie, but my understanding of that article you posted is that the loophole still exists on other jurisdictions.
Click to expand...

You are indeed correct Pitt_St... the first line of the article said
the Victorian government was the first of the states and territories to introduce new legislation
Click to expand...

When the other states follow Victoria's lead is anyones guess.

Jamie
 
I think that further to the discussion so far regarding property being able to be purchased by minors, the real situation is that to qualify for the FHOG, the purchaser MUST reside in the property within the first year of purchase.

Unless the family of the child who has "purchased" the house moves into that house as a PPOR then they are clearly breaking the rules and buying an investment property in the child's name.

Surely it is easy enough for government dept of revenue to check which grants have gone to minors and then cross check to see if they are residing in that house. If not then the parents who have purchased that house should be treated the same as any other person who has tried to rort the system ie made to pay it back along with a fine.

What do others think of people who unfairly or illegally try to cheat the system?

Nat:)
 
Originally posted by Spiderman
abcd wrote:

'What still puzzles me is how they got it, when an under 18 cannot even own a property !'
Click to expand...

Well I’m confused, we bought our first property when I was 16…….and yes, I can remember that far back. :p

There were never any questions about my age when I signed the contracts…….. maybe because it was in joint names, and my then boyfriend was 20? Who knows!! Anyway, no one has ever wanted to take it off me, so I think I’m safe :D

Ruby
 
Originally posted by natmarie73
I think that further to the discussion so far regarding property being able to be purchased by minors, the real situation is that to qualify for the FHOG, the purchaser MUST reside in the property within the first year of purchase.

Unless the family of the child who has "purchased" the house moves into that house as a PPOR then they are clearly breaking the rules and buying an investment property in the child's name.

Surely it is easy enough for government dept of revenue to check which grants have gone to minors and then cross check to see if they are residing in that house. If not then the parents who have purchased that house should be treated the same as any other person who has tried to rort the system ie made to pay it back along with a fine.

What do others think of people who unfairly or illegally try to cheat the system?

Nat:)
Click to expand...

Nat, I think you're jumping to conclusions here.

I suspect most of the minor recipients are residing in the house. The parents have probably bought a new home and being ineligible for FHOG themselves, have put it into the name of the child.

Probably one or two agents/lawyers are responsible for most of the owners. They find a good thing to help them sell houses and make a machine of it.

Totally legit. Beware of always assuming it's a rort -- it will cost you a lot in lost opportunities. I like to ask "how could they do that legally?"

Regards

Paulzag
Dreamspinner
 
Nothing in the FHOG guidelines specifies how long you have to reside in the house, only that it must be used as your PPOR within 12 months of purchase.

I agree that 2 year olds getting the FHOG goes against the spirit of the grant, but in the scenario that Paul described my reaction is, "Good thinking". Lots of investors have also used the FHOG to buy a home, live in it for a while and then set it up as an IP or renovate and sell for a profit. Is this wrong?

You have to wonder if the parents will hand over the keys to the child when they turn 18 and say to them, "This house is yours, and is owned by you. Enjoy."
 
Forgetting the FHOG for a moment, there's another reason why you would like to get a child to buy the property.

If the parent has a PPOR and then moves to a new house, and then if they bought the new house under the child's name, they'll get to treat that property as a PPOR. Now, as long as they move back into their old house within 6 years, they can then effectively get 2 houses as being a PPOR and hence, pay no CGT.

Or is my reasoning flawed?
 
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