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I'm just wondering how this works, so generally once the funds are released in regards to the FHSS scheme you can use this to purchase your first home. For this to be eligible you are required to live in the property for a period of time (1 year?), other wise you are penalised. That makes sense.

So what happens if you purchase a property that is currently tenanted and you can't move in immediately without breaking a fix term lease? Will you be penalised if you can't move in until the lease expires (and say the expiry is almost a whole year)? Or does the FHSS scheme require you to break the lease (and incur the consequences) to satisfy living in the property?
Can anyone give me some clarity around this?

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Hi @Lexi

 

Welcome to our Community.

 

You are correct to identify that you are required to live in the home for a particular period in order to meet the requirements of the first home super saver (FHSS) scheme.

 

You have up to 12 months (or other period allowed) from the date you requested the release of FHSS amounts to sign a contract to purchase or construct a home.

 

You must genuinely intend to occupy the property as a home, and demonstrate this by:

  • occupying or intending to occupy the property as soon as practicable after purchase
  • occupying or intending to occupy the property for at least six of the first 12 months from when it is practicable to occupy it.

 

You can read about these requirements by checking out the after your savings have been released section of the first home super saver scheme page on our website.

 

The reason for the inclusion of the word practicable is to provide some flexibility around when you need to move into the property as it isn't always possible to move in immediately after settlement date.

 

Also, the timeframe doesn't start until the date that it first becomes practicable to occupy the home, not the contract or settlement date.

 

There are a number of reasons for this flexibility. For example, some applicants will be requesting a FHSS release to construct a home. They won't be able to move in until it has been completed and ready to move into.

 

Ultimately, determining when it is practicable to occupy the premises will depend on the facts and circumstances of a particular case. However, it is necessary for your intention to occupy the premises for the requisite period of time to be genuine.

 

For more information, we have some legal documents that you can read if you like. You can check out GN 2018/1 (FHSS scheme Guidance Note) and LCR 2018/5 (FHSS scheme Law Companion Ruling). Both can be found in our legal database.

 

If you are genuinely concerned about the circumstances of your scenario, you are welcome to submit an advice request. You can check out the small business and individuals advice page for more information.

 

Hope this helps.

 

Thanks,

 

ChrisR

1 REPLY 1

Best answer

ATO Certified

TaxTime Support

Replies 0

Hi @Lexi

 

Welcome to our Community.

 

You are correct to identify that you are required to live in the home for a particular period in order to meet the requirements of the first home super saver (FHSS) scheme.

 

You have up to 12 months (or other period allowed) from the date you requested the release of FHSS amounts to sign a contract to purchase or construct a home.

 

You must genuinely intend to occupy the property as a home, and demonstrate this by:

  • occupying or intending to occupy the property as soon as practicable after purchase
  • occupying or intending to occupy the property for at least six of the first 12 months from when it is practicable to occupy it.

 

You can read about these requirements by checking out the after your savings have been released section of the first home super saver scheme page on our website.

 

The reason for the inclusion of the word practicable is to provide some flexibility around when you need to move into the property as it isn't always possible to move in immediately after settlement date.

 

Also, the timeframe doesn't start until the date that it first becomes practicable to occupy the home, not the contract or settlement date.

 

There are a number of reasons for this flexibility. For example, some applicants will be requesting a FHSS release to construct a home. They won't be able to move in until it has been completed and ready to move into.

 

Ultimately, determining when it is practicable to occupy the premises will depend on the facts and circumstances of a particular case. However, it is necessary for your intention to occupy the premises for the requisite period of time to be genuine.

 

For more information, we have some legal documents that you can read if you like. You can check out GN 2018/1 (FHSS scheme Guidance Note) and LCR 2018/5 (FHSS scheme Law Companion Ruling). Both can be found in our legal database.

 

If you are genuinely concerned about the circumstances of your scenario, you are welcome to submit an advice request. You can check out the small business and individuals advice page for more information.

 

Hope this helps.

 

Thanks,

 

ChrisR

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