Living in your new house with new home buyers grant.

Hi,

I'm looking into building an investment property in Melbourne and using fhe first home buyers grant. The goal is to live in it for 6 months as required then rent it out. My question is, do I actually physically live in it? Or I just cannot rent it for the 6 months.

Thanks for any help.

 

It is an Owner Occupier grant, so you need to build a house that you will occupy as an owner.

 

This is getting crazy. Did anyone do the sums on how much it will cost (no tax deductions while living in it, loss of some depreciation deductions up front when you rent it) compared to the new home buyers grant? Plus loss of rent, if you take it to the extreme that the op is considering of keeping it empty.

ironically the dollar signs are blinding people to the actual numbers.

not even taking about the risk of building in new suburbs, which is where most of this stuff ends up.

guess the grant is doing what it was aimed at, supporting the building industry.

 

Will it be free from Stamp Duty in Victoria? Sometimes SD on an IP costs more than any tax benefits for six months.

 

Yeah.... But.... Why call it a FHB grant or put a requirement to live in the place then think it doesn't apply to the OP?

That subsidy is coming out of our taxes which is why it is a targeted measure.

 

Yeah the sums are basically FHO + new home build is 10k + 25k, + no stamp duty on a property that I aim to purchase just under 600K to reap all those benefits. I am currently paying rent at only 150 p/w = 7800 p year. I have absolutely no appliances, so I would think the extra 7800 would pretty much be all my furniture/appliances, and the actual labour of having to move for one year and then move back out to rent it. Depreciation I think will be about 12k in the first year, big whoop, you'd had to pay it regardless. All that while I get to live in a location where I want to live and not have to commute all that extra time for work, thus saving me a lot in tolls and petrol also.

Plus I wasn't looking to build in a new suburb.

I'm probably way off in my way of thinking or even saying as I'm fairly new to all of this, but I just thought I'd give you some insight to what I am thinking.

 

Whether you do this or not, I would suggest that if you INTEND to buy & move in for a year, that you don't buy any extra furniture or appliances, so that when you move back out again, you can just go back to how you used to live. If, on the other hand, you change your mind & enjoy living in your new property, you can make the above purchases then.

 

That's pretty much what I just said. I don't want to buy anything as I don't have anything and only would be in there for around 6 months and then I would be left with all that extra stuff. Deciding to live in it after is not the point of why I'm buying this house so that wouldn't be an issue either.

 

Sorry it is 12 months for exempt stamp duty, but by the time the house would be built it would only be around 6 months.

 

I think you may be interpreting the 12 months rule with rose coloured glasses. The VIC SRO website specifically states you need to live in the property for at least 12 months.

First Home Owner | State Revenue Office

The previous costing comparison isn't calculated correctly (specially the gearing benefits from depreciation). At the money you're almost certainly better off financially to build and get the FHB benefits than to rentvest. The benefits amount to at least $40k in value. At a $600k - $750k price point, I seriously doubt you'd reap that level of net reward from investing in the first year.