Can I co-own a rental property and receive the FHOG when I buy the outstanding share of the property?

by Aniska
(Sydney , NSW)

If I was to co-purchase an investment property with my parents, and subsequently purchase their share of the property when I am able to afford it, am I entitled to the FHOG if I make the property my main residence at the time of purchasing my parent's share?

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Claiming the FHOG on buyout
by: Elizabeth Elwell-Cook

This is an excellent question, Aniska!

I would check this with your conveyancer before going ahead, as laws have recently changed, but I believe it should be possible. The only hitch is likely to be in the fact that it is the same property. But legal advice should be able to answer this for you once and for all.

Here are my thoughts:

Firstly, in the past, the FHOG has been available to people who have previously owned an investment property, but not lived in a property they have owned before.

Secondly, as long as your parents are not on the deeds when you purchase the property and claim the FHOG, then should be okay.

I say this from my own experience in the past five years: My first home was, in fact, one that my husband and I lived in for a while as tenants. My father bought the house in his own name (we were not on the deeds) and we rented from him, covering all the mortgage payments. When we were able to save enough to purchase the property off him, we did so, and were still entitled to the First Home Owners Grant, which was (at that time) $14,000, and applied to both old and new properties.

You must remember that in New South Wales, some parts of the FHOG now apply only to NEW properties. Please make sure that you are meeting all the proper *current* criteria before you sign anything!

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