Gov Builder Grant 25K thoughts

Hello everyone,

Thought of seek your input if it's a wise move with following strategy, so I'm currently lived on PPOR in Canberra, I've been thinking to move out and rent out my PPOR and make it as IP as it's positive gearing property.

I'm currently paying $1600 per month for my mortgage, if i rent it out the rental is around $550 per week.

Initially i was thinking to rent an apartment with weekly rent budget $400 - $420 per week closer to the city, rental price property is quite high here in Canberra.

Now with the government builder grant 25k, it is a wise choice for me to purchase a 1B apartment with the price range $300k - $360k, and my monthly mortgage for the apartment will be around $1200 - $1300 with 10% deposit.

I know unit type property don't gain much capital gain here in Canberra and many investor against the idea of buying apartment type property due to it ongoing body corp fees and long term gain.

The way i look at it, if i ended renting i will be paying my rent approx $1600 monthly and that's dead money, whereas if I purchase an apartment my mortgage for the apartment will be lesser than renting but i have to fork out that extra $5k - 10k plus Gov 25k grant to make up 10% deposit for the apartment.

Given with the government incentive, is it a smart move to buy an apartment property based on aforementioned scenario.

I would appreciate hearing your thought and feel free to chip in your advice with such strategy.

thanks.

 

Buy a new build townhouse in Goulburn. Get the 25K Homebuilder. Get the NIL stamp duty available in NSW for new builds. Rent out your Canberra property and go live in Goulburn . Short commute from Goulburn to Canberra to work for 6 or 12 months..... then either move back into your Canberra property and rent out the Goulburn townhouse - where vacancy rates are 0.9% ... or don't

 

How would an apartment qualify for HomeBuilder ? You arent building it. Even a duplex may have problems. Nobody has seen the law

 

I think basing your plans off tax incentives and government grants is a terrible idea frankly. At most, they should be a sweetener on top of actual important things like overall strategy and individual property selection.

 

the selling agents that i talked to they advised apartment qualified for the builder grant as they are newly build property.

 

Construction needs to commence AFTER June 4 to be eligible. You also need to remember that there will only be 27,000 HB grants available... and the money is paid after Occupation certificate - on a first in first served basis. Apartments may take a long time to be finished, by which time the 27,000 grants may have all been taken. The entire HB thing is a bit of a crapshoot

 

You're breaking his heart on the gone $25K

 

oh well, thanks for clarifying.

 

Better that you know what is likely to work ...or not work

 

The Treasury estimates were a set number. The PM and Treasurer have indicates the actual number of approvals in not capped at all.

Final program costs will depend on actual take-up of the grant and may differ from these estimates as HomeBuilder is an uncapped and demand-driven program.

 

There is an agent that has lied. Dont believe anything else they say.
Only the person constructing can get the Commonwealth HomeBuilder grant. ie an "owner occupier". You cant buy a new property and be eligible.
Could you be confusing this with a different state concession ? eg duty
Home buyer concessions from 1 July 2019

 

I think you are incorrect here Paul. As long as moved into as a PPOR and not an IP.

Based on a Goulburn purchase, here is NSW eligibility.
HomeBuilder

Brand New property constructed within the time frames and individual qualifying criteria (ie OTP sales or new completions) would still be eligible to the first owner.

This was clarified after the initial treasury release and seems to be implemented on a similar basis across the states. (Only checked Vic & Nsw).

Not saying it is a good or bad idea for the OP though.

 

I thought the Stamp duty exemption was only available to first home buyers? As OP has a property in Canberra, does this not mean they're not eligible? Unless it states you're eligible if you've never purchased in NSW before?