NSW First Home Buyer Assistance scheme - Dual Occupancy Property

Hi everyone,

My partner and I are hoping to soon purchase our first property. Currently we are looking at properties on the NSW Central Coast with a budget of $650k to maximise our the benefit of the "NSW First Home Buyer Assistance scheme" (i.e. full exemption so that we don't have to pay transfer duty).

Based on your understanding/experience, if we were to purchase a Dual Occupancy property (i.e. house at the front and seperate Granny Flat out the back) will there be any issue with us occupying one and renting out the other in the first 6 months? We are looking at one at the moment that has a vacant granny flat (which my partner would occupy as her primary residence while I reside at our current residence) and the house is currently occupied (which is fine for us).

Based on the guidelines on the the NSW Revenue website, to qualify for the FHBAS;

• the contract date must be on or after 1 July 2017 and must be for the whole property - TICK
• you must be an individual, not a company or trust - TICK
• you must be over 18 - TICK
• you, and your spouse or partner, must never have owned or co-owned residential property in Australia - TICK
• you, and your spouse or partner, must never have received an exemption or concession under this scheme - TICK
• at least one of the first home buyers must be an Australian citizen or permanent resident - TICK

You or one of the other first home buyers must

• move into the new home within 12 months after buying the property and - TICK
• live there for at least six continuous months - TICK

Apologies Mods if this was the wrong area. Thanks in advance for your help everyone.

Cheers,

Mr. Tall

 

We are looking at one at the moment that has a vacant granny flat (which my partner would occupy as her primary residence while I reside at our current residence) and the house is currently occupied (which is fine for us).

Its not a dual occupancy property but a dual lease property ? The NSW rules may not recognise an occupancy of a granny flat as acceptable occupancy of the home. At least not until the main home is occupied. Also the ATO certainly wont consider that the main residence exemption is met for either portion. You may have a partial-partial main residence CGT exemption at best.

Does the existing tenancy include the rights to the GF or it a separate lease ? You cant just move in with the existing tenants when you buy.

Call OSR for guidance on the first home buyers scheme guidance and also consider the CGT issues.

 

Thanks for your response Rolf and Paul. I have sent an email to the OSR with the situation, just pending feedback.

I'm really unsure how CGT will be handled - I have tried using the online calculator/tool bvut it comes up saying the situation is to complex due to multiple dwellings. Who would you recommend we speak to about this?

The only other thing I have done since posting this is prepared a simple forecast spreadsheet to assist with identifying profitability. If you have the time I would appreciate any feedback you have on it here.

Cheers

 

Will be keen to see what the OSR comes back with to you Mr Tall – I'm considering doing something similar myself!

 

I pretty much did the same thing in WA with my FHOG. It was a duplex pair on one title.

I checked a few times with the OSR in my state and actually got a couple of different answers. Mostly importantly, I went through the relevant legislation and checked for myself (I'm a solicitor).

Note that the legislation is slightly different in each state so my example isn't good as a precedent anywhere else.

I'd recommend getting proper legal advice, and caution relying on an opinion from OSR, as counter intuitive as it sounds. Because the people you talk to there almost certainly are not legally trained.