Queries in First home super saver scheme

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Vishh, 5th Aug, 2020.

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  1. Vishh

    Vishh Well-Known Member

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    Sydney
    Hi All,
    I was looking at "First home super saver scheme" and had made contributions last year as well.

    upload_2020-8-5_12-30-58.png

    If we do a knock down rebuild, how will that work out? Although ATO said we have to live in the property for 6 months in first 12 months, after it is practical to move in".
    Knock down rebuilds take minimum of 8-12 months.


    2) There is a section for vacant land. Will this be applicable for knock down rebuilds?
    upload_2020-8-5_12-46-45.png


    There is a bit of overlap and I am confused. Hence need your help.

    Thanks,
    Vish
     

    Attached Files:

  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    1. It may not be eligible if you cant intend to reside in the dwelling being acquired. The contract is not for vacant land. The ATO may need to provide a interpretive decision if the dwelling wasnt habitable when acquired.
    2. Land with a dwelling on it is not vacant land.

    Take care as the vacant land rule has a catch and the timing on contracts poses a problem : In this situation you must not have purchased the vacant land before applying for a FHSS determination

    Answered: Purchase house to be demolished immediately to bui... - ATO Community
     
    Last edited: 5th Aug, 2020
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  3. Vishh

    Vishh Well-Known Member

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    Thanks the link you shared has the exact scenario. If the house is demolished and sold, then it suits the criteria, but I highly think that is impossible.
    How about

    1) I submit FHSS determination.
    2) Sign purchase agreement ( Add clause that vacant land is being bought)
    3) Request Release of Super
    4) In the 42 days settlement period, Agent lodges DA to demolish structure and done. (Can DA get approved within 42 days? Demolition may take 2-3 days max)
    5) Hands over site.

    In this case although I may have to bear demo costs which is fine.

    Thanks,
    Vish
     
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    You may need to consider the vendor. If they sell you vacant land could GST apply to their sale ? It could be a deal breaker. Or a deal maker. ie You agree to pay them price + $15K for the demo. You settle by instalments with extra $15K deposit from example. They then schedule the demo. You buy vacant land.

    Its almost impossible to expect a DA approval in under 2 months for many councils. Demolition is a process requiring approvals.
     
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  5. Curious2019

    Curious2019 Well-Known Member

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    Another option, buy the house, live in it for 6 months before knock down rebuild? That will give you time to sort out designs and permits anyways. Rent elsewhere while you do knock down rebuild. Just a thought?
     
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  6. Vishh

    Vishh Well-Known Member

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    The stampduty for land is around 18-21k. I forgot that. So buying house is better.
    So not worth taking the hassle of bargaining with vendor on demolition .
    Best option is to buy as it is.
     
  7. Vishh

    Vishh Well-Known Member

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    Yes I would have done that, but what if the house is unliveable?
    How does govt verify we stayed for 6 months? Do they come and inspect or only catch if we list the house for rental which I am not going to do anyway!