FHOG and Stamp Duty - Where Property Didn't Qualify as Primary Residence

LSLW on 18/10/2023 - 16:01
Last edited 18/10/2023 - 16:53 by 1 other user

Hello everyone, I hope you're all doing well.

In 2021, I purchased an apartment, and at the beginning of last year, an investigation was initiated regarding my eligibility for the First Home Owner Grant (FHOG) and Stamp Duty. It was brought to my attention that the authorities questioned whether my apartment qualified as my primary residence.

To be fair, they had a valid point. I was only there 5 to 15 days each month, but I never rented it out. I did try to contest their decision, but they presented sufficient evidence to prove that my apartment wasn't my primary address.

I'm willing to repay the amount I received from the government as part of the FHOG. However, I'm now faced with the prospect of having to pay an additional $10,000 in fines on top of returning the initial $22,000.

I'm wondering if anyone has ever been in a similar situation or if you have any advice to offer. I would greatly appreciate your insights and experiences.

Financial

Comments

  • tsunamisurfer on 18/10/2023 - 16:16
    +6

    Where were you? Out of the country? FIFO work?

    How do they know you were not residing on certain days?

    Other than having proof you were not physically there what else did they provide??

    If I was FIFO / away for work or staying at a GF / BF's place I'd be cheesed off especially if I haven't profited by renting / airbnb the place.

    • SLW on 18/10/2023 - 17:57

      I was living at parent as my work was down the road from theirs. But i lived in my apartment on the weekends

      They manage to pull electricity, water usage, and also tracked my call records and even talked to strata and tracked when i entered the apartment

      100% was not making profit from the apartment they can see that from my water and electricity usage.

      Thats i feel like its unfair to pay a fine..

      • Drakesy on 18/10/2023 - 18:37
        +5

        Geezus that's rough.

        It does state that it has to be your primary residence which would mean being there full time, strange that it seems they're really going after it now given you don't actually rent it out or pull an income from it, hell you could be living at your girlfriend's part time.

        Bit rough but hey, do wonder what the point would be going there just for weekends though. Either i'd live in it or rent it out and cop the lost FHOG

        Personally i'd fight it, it's not like you have another home under your ownership.

        • tsunamisurfer on 18/10/2023 - 19:07
          +7

          Agreed thats unfair.

          The thrust of the rule is to prevent people taking advantage of the FHOG and then still rent it out in the first N Months.

          I think its goes a bit far to go into your call log, strata complex access data and measuring your utilities usage to average.

          Even if you actively chose to live elsewhere, it is still technically your home.

          • Downvoter on 19/10/2023 - 00:47

            @tsunamisurfer: Defrauding the government isn’t fair either

            • Drakesy on 19/10/2023 - 11:22

              @Downvoter: The government manipulating definitions in favour of them isn't fair either.

              They've probably already burnt $10k in detective fees trying to get some evidence when in reality they really have nothing.

              Would be more beneficial if they went after those that defrauded the ATO of $1.2 billion and maybe tried to close their own loopholes rather than going after people in the grey area which aren't strictly breaking the law.

              • Crow K on 19/10/2023 - 14:41
                +1

                @Drakesy: Strong "there's murderers and rapists walking around everywhere why don't you go and catch the real criminals" to the cop giving you a speeding ticket vibes.

                • Drakesy on 19/10/2023 - 14:53

                  @Crow K: Ok, so if you broke the law and it's clear cut say by speeding i don't have a problem with it.

                  It's when they go out of their way, spending excessive resources to pursue a dubious case shrouded in grey that is questionable, meanwhile they're only too happy to hand out taxpayer money that was purely fraud related.

                  • Crow K on 19/10/2023 - 15:10
                    +2

                    @Drakesy: It's worse than that mate, it's a spurious inquiry on a who-can-say grey area filled with uncertainty and frivolous

                    Nah, I can't match your energy (or adjectives).

                    Guy's already admitted he never moved in to the place as a PPOR and he intended to rent it out, and data matching (phone towers, utilities, postal address etc) had him done like a dinner. Flat out fraud. Go to jail, do not pass GO.

                    There's no $10k for detectives to follow him around or "but how can we truly know if he was actually living there, the law is uncertain" to this.

                    If your thing is hating the govt and liking it when someone tries to get a cheeky $22K out of them, that's fine, but you need to wake up to yourself if you're seeing this as a witch hunt by bored bureaucrats.

                    • Drakesy on 19/10/2023 - 15:36
                      +1

                      @Crow K: Haha, just read later on in the thread where they confess they're going to rent it out.
                      Yep, the OP is SOOL.
                      Pay up.

  • Ocker on 18/10/2023 - 16:23
    +6

    Reckon by OP own admission he was caught trying to pull a swifty. My suggestion is to get the cheque book ready.

    • tsunamisurfer on 18/10/2023 - 17:45
      -1

      Reckon by OP own admission he was caught trying to pull a swifty. My suggestion is to get the cheque book ready.

      What is he was FIFO with a 2/1 rotation? 5 days becomes legitimately possible.

      • SLW on 18/10/2023 - 17:58

        I was not. I would not complain if I did something dodgy.

  • bobbified on 18/10/2023 - 16:25
    +3

    What definition of PPOR are they using?

    My understanding is, you can claim one place to be your PPOR. Even if you're not there very often and choose to sleep under some the railway bridge on most days - who says you're not allowed to be out and about all the time? If all your things are there and all your mail is sent there, I don't see how they can say it's not your PPOR.

    • mskeggs on 18/10/2023 - 17:14
      +5

      ATO rules aren’t necessarily the same as the rules for a state based grant.

      • bobbified on 18/10/2023 - 17:42

        Are there any very specific definitions? They all seem to be quite vague.

        For example, Victoria's one:

        Eligibility for the PPR concession
        A principal place of residence (PPR) simply means the primary home in which you live. It does not include holiday or investment properties.

        As a first-home buyer, you may be eligible for a PPR concession from duty if you intend to live in your home for a year, within 12 months of your settlement. This is called the residency requirement.

        The concessional rate of duty you pay depends on the value of your PPR and the date on which you signed the contract of sale. Use our calculator to calculate what you will pay.

        • miwahni on 18/10/2023 - 22:56
          +3

          Principal place of residence = the residence in which you live for the majority of your time. In OP's case, he's admitted to living with his parents during the week and at the apartment on the weekend, so his PPR is his parents' home.
          I do think the fines are out of line though, when OP hasn't rented the property out.

  • Crow K on 18/10/2023 - 16:34
    +4

    It's pretty easy to check these things, it really depends on how far down you're willing/able to drill.

    Where was their mailing address?
    How did their electricity/water use over that six month period compare with the next year?
    Which phone towers did their mobile check in with?

    And so on.

    I'm not suggesting that they Big Brothered' OP to the "we got your metadata" extent, this is just a response to the would-be defense attorneys saying things like "well how do they KNOW my client hadn't been at the property, I hereby declare they were there and you can't say otherwise" etc.

    • Mokr on 18/10/2023 - 17:14
      +4

      Brb turning on my taps on my second property

      • jjjaar on 18/10/2023 - 21:26
        +2

        Don’t worry, tonight’s Airbnb guests will do that for you.

  • JimB on 18/10/2023 - 17:10

    Where's the popcorn?

    • original15 on 18/10/2023 - 17:46

      Will we get more??

  • Meho2026 on 18/10/2023 - 18:35
    +1

    What was the address on your driving license?
    What state are you in?

    • SLW on 19/10/2023 - 02:37
      -4

      It had my parents address. I was planning to rent the apartment after 6 months only changed address for few things.
      Im in WA

      • Meho2026 on 19/10/2023 - 08:56
        +2

        It’s going to be difficult if not impossible to appeal the decision.
        The FHOG lodgement guide clearly states you have an obligation to meet the residency requirements, what they are and how to prove them.

        This document goes into more detail https://www.wa.gov.au/system/files/2022-09/CP-FHOG-DA-40.pdf

        There are considerations taken into account for people who did what you did but you made a big mistake by not changing your drivers licence address.
        That is what’s really stitched you up.

        The only thing that could save you now is if you used the address for the electoral roll.

      • Drpepper666 on 19/10/2023 - 09:41
        +1

        So you were planning to violate the FHOG agreement and got caught lol

        • SLW on 19/10/2023 - 16:16
          -2

          i was not going to Violate anything.
          Legally i am allowed to rent the apartment after 6 months, so not Voilate anything in my opinion

      • Drakesy on 19/10/2023 - 15:35
        +4

        It had my parents address. I was planning to rent the apartment after 6 months only changed address for few things.
        Im in WA

        And there's the smoking gun.
        Ok OP, yeah no sympathy from us unfortunately.

  • trapper on 18/10/2023 - 18:38
    +2

    I'm willing to repay the amount I received from the government as part of the FHOG.

    Why are you willing to repay this if you believe you were eligible for it? It sounds like you were eligible to me.

    • SLW on 19/10/2023 - 02:41

      I honesty have no ground to stand on.
      The investigation shows that it was not my primary address. It also shows that i was not renting or anyone lived there so seems unfair that me having to pay a fine though.

  • Masterpupil on 18/10/2023 - 18:41
    +4

    Given the sum of money they are trying to recoup from you, it seems like it would be worth getting a legal advice on this.
    Have a look at cases where they have prosecuted people for this (I'd guess VCAT or the equivalent) and see who represented those people then engage those lawyers for an advice.

    • SLW on 19/10/2023 - 03:28

      Thanks ill look into that

  • deme on 18/10/2023 - 20:41
    +1

    Did someone dob you in?

    • SLW on 19/10/2023 - 02:39

      Barely anyone knew i bought an apartment, so i doubt it

      • deme on 19/10/2023 - 12:46
        -2

        Barely anyone knew i bought an apartment, so i doubt it

        huh?

    • larndis on 19/10/2023 - 08:28
      +2

      Would be interested to know how it came to their attention

      • Ocker on 19/10/2023 - 08:38

        The authorities can (and do) have access to a properties usage data from utility companies - gas, water and electricity

      • offthetap on 19/10/2023 - 08:43

        i would also be interested to know how it came to their attention. do they just do random audits?

        • SLW on 19/10/2023 - 10:22

          Does sound very suss or I could be very unlucky.

          • Broke-Ken on 19/10/2023 - 10:34
            +1

            @SLW: My guess is that they do basic checks like cross reference the address to the one listed on your drivers license and/or even the electoral roll as Meho has mentioned above. Those that don't match then get flagged for investigation.

            • Crow K on 19/10/2023 - 10:48
              +1

              @Broke-Ken: Yeah, I'd be surprised if they just didn't have software checking these things quietly in the background and generating reports. It's pretty easy to do if you have the data (and they do).

  • 82norm on 19/10/2023 - 08:44

    I think the fine is a bit steep, considering there was no deliberate or intentional fraud. You could seek an administrative review and see what they say. If you were a primary carer looking after your elderly parents, hence the reason for lodging at their place, that might help, but you mentioned it was closer to work.

    Best of luck, but as some mentioned, seek some legal advice.

  • Drpepper666 on 19/10/2023 - 09:40
    +4

    Weird to buy an apartment then live with parents. I genuinely don't understand it. Methinks more to the story than op letting on

    Edit : ooops see above he admits to planning to rent it out

  • srhardy on 19/10/2023 - 09:41

    Dude, someone does not like you and they dobbed you in. If you talked about this then you screwed yourself! Being dobbed in is 99% how they detect this, 1% is renting, not changing your licence, mail, voting/registered as all this is cross checked. Never heard of usage of Utils as a detection method but yeah; can be used to prove lack of residency

    But I would contest this as it’s your primary and only residence in your name & you didn’t rent it and they provided the proof of that themselves. Work covid into your excuse too as a reason; elderly parents and all.

    I see you said you didn’t change your licence and I’m guessing registered to vote location; you muffit, that’s going to cost you 22+10k

    And toss in you admitted you did this as you ‘planned’ to rent after 6 months, well your well and truly due a bill for stupidity

    • JimB on 19/10/2023 - 11:13

      Won't really cost him $22+10k,

      It will cost him $10k. He's returning the $22k he should have never received in the first place.

      He may be able to once again claim the $22k or whatever the FHOB grant is in the future.

      • Crow K on 19/10/2023 - 11:17
        +1

        I guess it depends how how stringently the govt applies the F in FHOB

  • jaejae69 on 19/10/2023 - 10:31

    I just helped my parents go through something similar. They got a phone call from revenue department asking them to clarify if they believe they satisfied the residence condition. They basically told my parents on the phone that if they admitted to not satisfying the condition now, a formal investigation will not commence and they just need to pay back the money received. However if they insist that they had lived there and satisfied the condition, the investigation would commence and if found to be false, there would be fines on top of paying back the grant.

    Did you not receive one of these calls too? They were quite clear over the phone that just staying there a couple nights a week would NOT satisfy the residence requirement.

    • SLW on 19/10/2023 - 10:48

      I didn't receive a call like that.
      Only received an email saying that they will do a formal investigation

  • SLW on 19/10/2023 - 10:32
    -1

    Yeh that was my question too. the first email from the investigator saying my water and Electricity bill is too low.
    I contest saying its only 1 person living blah blah.
    Then escalated to proof of furniture and photo of me staying there.
    All this were going in my favour and she couldn't prove anything at this point.
    She wanted my bank statement and call history.
    I told her I don't feel safe providing her my call history but I did provide the bank statements.
    She managed to contact Optus directly and got the call records this screwed me.
    On top of that she went to Strata and managed get how many time came to the apartment

    • JimB on 19/10/2023 - 11:16

      They are quite thorough ain't they?

      Anyway, if not renting it out, why didn't you move in there?

    • samfisher5986 on 19/10/2023 - 13:44
      +2

      Sounds like they put more effort into finding out if its your primary residence then the police do when a crime is committed.

      • Crow K on 19/10/2023 - 14:32

        :(

    • Tyrx on 19/10/2023 - 17:03
      +1

      Wait - you are wondering why you are receiving additional fines in addition to having to repay the sum? You went out of your way to obstruct them. You're lucky that they have not opted to charge you with a criminal offense for committing fraud.

    • kiitos on 31/10/2023 - 11:06

      What was the call history showing? I guess the mobile towers you were connected to? That's clever.

  • Crow K on 19/10/2023 - 10:59
    +2

    only one person living blah blah

    Yeah, when you answered their query with "yes I actually WAS living there as my PPOR" that kicked off this whole chain of events. The fine is for lying to the govt (both originally in your application and when they checked up on you).

    Maybe this is a good moment for the mental gymnasts in this thread to reflect on their "but who is to really say whether I was "living" in another "home" your Honour" style arguments. This is what FA and Find Out looks like, you get a fine for lying/wasting people's time.

    Also: Whether you rent the property out or not has nothing to do with it. (Much in the same way you can't appeal against a No Stopping penalty with "but no one else was inconvenienced, I was the only car there so it doesn't matter I stopped or not). Your role isn't to decide what the purpose of the rules are.

  • Nugs on 19/10/2023 - 15:02

    Does this mean you will be eligible for future fhog?
    .

    • Tyrx on 19/10/2023 - 17:07
      +1

      No. The state and territory schemes exclude those who have held property before. There are some jurisdictions which allow you to apply for them after not holding any interest in a property after a certain period of time though.

  • Gnilgorf on 20/10/2023 - 13:25
    +1

    Ooof thats rough. Can only empathise having being audited by Vic's SRO for FHOG a while back. Though in my case, I had decided to rent out the spare room only a few months after moving in.

    It was pleasantly surprising how in depth the investigation went in order to prove PPR. They did the typical request for various insurances, utilities, services etc. And eventually got cleared but it was nerve wracking when it happened. The services bills looked suspiciously, even for 1 person, then alone 2 and was the only time where buying an 'energy efficient apartment' became a hassle. Took me forwarding the current tenants bills (I moved out 3 years later), to prove it really was just that low.

    I have no idea if they ever contacted my strata or building manager, but being part of the OC committee at the time, i'm sure they would have vouched for me. xD

    At the end of the day, the risk was there with staying with parents, and the gamble didn't pay off.

  • webtonmoy on 20/10/2023 - 14:57
    +1

    So sorry to hear about your ordeal. Given the large sum of money involved, I would recommend seeking legal advice first, before you agree on anything.

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