My brother, mother, and I want to purchase an investment property, but we were thinking to only take out the loan in mine and my brothers’ name. The plan was to occupy the property for 6 months so that we will be eligible for the first homebuyers grant (Mum would not be eligible as she has purchased property before). Can all three of our names still be on the deed for the property, if only 2 of our names are on the mortgage?
These are questions we get quite regularly and would be best to discuss more of the detail around your decisions. Including multiple parties can be quite complex, and you need to consider more than just the transaction you're entering into, but also what impact that will have on future borrowing.
I'm based in Lane Cove and would be more than happy to assist you and go over the detail and how to best structure your lending solution.
Feel free to give me a call to discuss.
0412 092 107
If your mum goes on the title you will no longer be eligible for the grant. It is who is on the title that will determine your eligibility for the grant and not who is on the mortgage.
Also, banks require everyone on the title to be on the mortgage.
Hope this helps.
Hi Jared. You have a pretty obvious conflict in your plan:
a: you all want to buy an INVESTMENT property
b: you also want to get the first HOME owners grant.
see where I am going here?????
Its called the first HOME owners grant for a reason. Its not the first INVESTMENT PROPERTY owners grant.
You first problem is that whilst it is technically feasible to buy the house, move in for 6 months, grab the money and then move out and put a tenant in it.......its not that simple, because the pesky banks and their stupid rules about having people named on the title deed and listed as a borrower make life a little difficult. So you need to make a decision about whether you Mum is part of the deal or not in the equation. Then you need to make sure that IF you are entitled to a FHO grant that you dont shoot yourself in the foot.
And dont forget if your INTENTION at the outset is to move out on day 184 of ownership, then you might be pushing the friendship with the grant. I have never heard of anyone who has been told that they have to pay it back, but you need to be crystal clear on the rules around what you need to do to
check out this :
this is on the website above as an example of what NOT to do:)
21/04/2016 – Oaths Act and Crimes Act offences
Detail: A 27 year old male Business Analyst pleaded guilty to one offence under s.25A of the Oaths Act 1900 and one charge under s.192G(b) of the Crimes Act 1900 before Magistrate Still. The defendant had applied and received a First Home Owner Grant of $7,000 along with an Exemption from paying the duty of $12,873. The defendant failed to reside in the property that was the subject of the benefits and supplied a number of false documents to support his claim that he had resided in the property, including two false Statutory declarations. On 21 April 2016, Magistrate Still sentenced the defendant to 150 Hours Community Service Order for the s.192G(b) Crimes Act charge and a $2,000 fine in respect of the s.25A Oaths Act charge. His Honour made an order for professional costs of $12,000 to be paid by the offender and to report to Hurstville Police Station to be finger printed, pursuant to s.134 of the Law Enforcement (Powers & Responsibilities) Act 2002.
Related legislation: Oaths Act 1900, Crimes Act 1900 and Law Enforcement (Powers & Responsibilities) Act 2002.
You have bigger questions to ask around the format of the purchase - to ensure everyones interests are covered both short and long term.
What happens when you or brother wants to sell out and buy own home with spouse? What happens in t he event of death etc.? What happens if... - so many if's!
You need to speak to your accountant(s) and maybe get legal advice to structure up right, have wills updated and an agreement signed off (like a parnership agreement for businesses) to protect each other.
But the short answer would be along the lines of - you probablt can't have mum on the title as this could kill the grant - so she won't be a legal owner in that case. Loans can potentially have mum included, though there are potential isses and the banks don't like it. Negative gearing might only be in the legal owners names, unless...(speak to your accountant) and Capital Gains Tax implications would be to the same parties.
Happy to have a chat about this, but bigger issues around the idea than just first home owners grant.
Hi there Jared,
This is a tricky one and a scenario that all of you need to think about.
Firstly, your mum can go on title but she can only have up to 5% ownership. This will then not have any impact on you obtaining the FHOG.
I recently did this where Dad gifted son money. He was on title of property 5% and son was able to get the full FHOG, despite Dad being a property owner. However there needs to be a reason as to why she would be going on title. (in this case was for protection due to the contribution he provided).
However once your mum is on title, she will also have to be on the mortgage documents - either as borrower or as a guarantor so this will have an impact on your mum and given the lending environment, a more thorough understanding of your familys' circumstances is critical. In my scenario above, Dad was a guarantor.
As there are more than one sibling in this scenario, this adds more complexity to the situation. As circumstances can change with siblings - marriage / divorce etc and this can then have an impact on the other two remaining parties so a detailed exit strategy would need to be considered.
In principal - it could work. Specifically for you, unable to tell until an assessment is done on your personal situation. An assessment would need to be done on your owner occupied scenario and also the investment scenario as we would need to see that affordability is evident on all scenarios given that this is your intentions.
Always happy to discuss this in further detail. Hope this information is of use,