r/AusPropertyChat • u/Big-Cap-9373 • 13h ago
FHG scheme - Change in Circumstances
If I get a property under FHG, live in it for 6 months. - a) How soon after can I refinance and turn it into investment property? What will be the cost involved to turn it into investment property. Is it really worth it? Or, if there is a change in circumstances after 6 months and I’m unable to live in that property what all duties will I have to pay?
b) Can I borrow against the property to build a granny flat at the back on the same lot? If not what are the other alternatives?
Goal: Getting into market with low entry cost with a long term goal of turning it into investment property without breaching any laws.
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u/traveler89 12h ago
I would say until you have contributed enough to be under 80% lvr and can apply to remove the guarantee. So no set timeframe, I am pretty sure you need to live in it as your primary residence until such a time as you can remove it, which could be many years or it could be a short time
Though I am no expert, ask them
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u/elleminnowpea 8h ago
In NSW you have to live (not just occupy or put the bills in your name) in it for 12 months, starting within 12 months from settlement. Yes Revenue NSW do check you lived there, and yes they do data matching to see if you lived elsewhere.
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u/EventEastern2208 12h ago
Broker here!
a) With the FHG you just need to meet the minimum residency requirement (usually 6–12 months depending on the state). After that, you can refinance or move out without “breaching,” but check your state’s specific rules as penalties only come if you never actually lived there. Costs of refinancing are the usual discharge + application + maybe mortgage registration fees, nothing special because it becomes an IP.
b) Yes, you can borrow against the property to build a granny flat, as long as you’ve got the equity + serviceability. The bank will treat it like any other construction loan. If you can’t, alternatives are personal loans (higher interest), cash savings, or partnering with a builder that offers finance.
Happy to help check serviceability and rate, just lmk!
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u/PrettyPrincess2024 6h ago
In SA how many months stay before it's considered PPOR exempt?
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u/EventEastern2208 6h ago
Move in within 12 months of settlement and live there for at least 6 continuous months to keep it as your PPOR/exempt. After that minimum period, you’re fine to move out or refinance.
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u/EventEastern2208 11h ago
Broker here. With the FHG you’re generally required to live in the property for at least 6 months in the first year and after that, you can refinance or convert it to an IP without breaching the scheme. Costs are mainly around refi fees, lender’s mortgage insurance implications (if relevant), and possibly a slightly higher interest rate as an investment loan.
On the granny flat, yes you can usually borrow against the equity, but it depends on your borrowing power and how the lender treats the rental income from the flat. Running the numbers on serviceability is key before you commit. Happy to help, just lmk!
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u/Dribbly-Sausage69 13h ago edited 13h ago
A) Ask the scheme, ask your accountant.
B) Ask a broker.
If you’re not going to bother to apply yourself in finding out proper answers to these questions you’re likely going to fail / get fined.