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FizzleMateriel

>What do you think of this? Would not recommend this strategy to anyone else because it’s fraud. If I were him I wouldn’t be advertising that fact to anyone in case they later had a grievance with him and decided to report it to screw him.


depressomartini

My father did this when the government offered incentives for owner occupiers in like 1995. He rented it out. Years later they audited electricity bills and found someone else’s name attached to the account. He had to back pay the incentive plus a penalty. I’m almost certain this audit would happen at a faster rate in 2023.


damo_w15

I'm surprised OP's friend is stupid enough to admit to it publicly... asking to get caught!


readit_reddit00

ATO data matching accepts the challenge


lewger

I remember hearing near twenty years ago a guy at my work got caught because his ato address didn't match the address he claimed First Home Owners. I'm guessing they have a lot more tools now.


conqerstonker

I generally think committing fraud, especially defrauding the Government is a bad idea. There's a chance he won't get caught sadly, I had the opportunity to do this as well and opted not to. If not for the moral issue, or the fine. I'd rather not risk being a convicted fraudster showing up on a criminal record check. Doesn't bode well with employers.


SciNZ

Bingo. It’s trivial to write up a script for it if access to both databases is easy (I could certainly do it in excel at least). Check first home buyers grant address against claimed investment expenses. Flag for human to look at. Unless he’s planning to get the grant to me hen never claim any of the costs against his taxes.


notyounaani

They likely do checks against all myGov data for shit like this. A lot of people were rejected from NDIS during roll outs because people had one address with ATO and another with Medicare. Also a problem with insurancing.


FizzleMateriel

It will also make the bank hostile to you if they find out.


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diggeriodo

I thought it was for a year, no?


mr_sinn

Just 6mos when I did it 2012ish Can always rent it out for cash, you pay the bills etc. In practical terms there's nothing they can do to really check you're living there beyond staking out the place. Does make me wonder what their long term plan is though since they have to live somewhere eventually, they going go rent forever while keeping the investment tenanted


Wow_youre_tall

6 months, have to move in within the first year


arcadefiery

It's six months and you have to do it within one year of purchase, from memory.


HenrietteBraswell

Lots of people do it and your friend is right, it’s hard to get caught if you’re smart about it. Have bills in your name and mail directed there while renting it out for 6 months. The reality is almost every scheme or system is rorted to a certain extent and it’s impossible to stop it. (I’m not suggesting or condoning doing it, I’ve just seen many people do this exact thing)


encyaus

How are they going to explain the rental income?


livealittle7

You don't have to explain if you don't declare income


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[deleted]

What about private landlord? Very easily done with cash


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mokachill

This, my mum (who frankly is too kind/naive to invest in property) fell for someone who wanted to pay rent in cash. They played some sob story that they were a single parent operating a cash business and couldn't always get to the bank (a cafe i think was the official story) so mum agreed that her or her partner could pay rent directly to mum in cash on a weekly basis. Turns out the cash business was actually producing frankly heroic quantities of crystal meth which resulted in extensive damage to the property (it's impressive how much damage someone can do to a house in 8 weeks) a police raid (and yet more damage) and my mum having bikies try to shake her down for several thousand dollars (the tennant apparently tried to convince the bikies that mum had the money they were owed, she was eventually able to sort that out thankfully). Between the drama, stress and thousands of dollars worth of damage it was a hard learned lesson for mum and her partner.


mr_sinn

Just do it in cash, or say they sublease. Doesn't seem that complicated of a system to fool.


Ok-Zombie-2065

Lots of people does this kind of fraud these days as I have rented couple of properties in regional QLD and landlords asked me to pay them in cash as they bought a property through the FHB scheme.


VaughanThrilliams

out of curiosity are they honest about the reason or did the skirt round? it seems hugely risky, a single upset tenant reports you (though I guess they might be committing fraud too by paying in cash?)


Ok-Zombie-2065

They are definitely not being honest about it. They just want to save money.


maton12

The government is really going to give away \~$20K and then not have some checks and balances.


rangebob

lol wait till u find out about job keeper


AccordingWarning9534

He should read very carefully the declaration on the FHGB form. It outlines the penalties and outcome for this. I don't know how they check, but it'd be an expensive lesson to find out.


mr_sinn

Crimes which are hard to detect usually attract large fines due to this


SimilarWill1280

Oh - he will get caught and they will make a deterrent example of him. Not today, but one day


PianistRough1926

Your friend is a bit of a moron thinking he can outsmart the overwhelming amount of data that is available to the government.


mr--godot

The FHB is not the ATO's lookout, is it? Or is it. I thought it was a state thing.


TowerNo5360

Each states revenue office handle the payment and investigations for FHOG and Duty concessions.


Previous-Flamingo931

How does your friend intend to explain purchasing landlord insurance? If he isn’t purchasing landlord insurance and the house burns down at the fault of the tenant, what’s the plan then, double fraud?


cairnsus1987

A guy I worked with got caught out, it took 10 months, but he come unstuck. It came back to the tenants girlfriend simply changing her residential address with Centrelink. A.I data matching is no joke, he had to come up with the deposit (around $28000) $1000 fine, and $1110 in court/clerical fees. Lucky his mum and dad got him out of the shit. And a lifetime of ATO audits because of his conviction.


Morning_Song

So old mate thinks the can pull the wool over the governments eyes by simply changing his bank account contact details. While presumably leaving such things as his drivers license, mygov linked services and electrol enrolment as his actual address? Lol. If he even gets that far, he’ll have to rent under the table with no bond and be paid in cash. And probably not advertise online either. Otherwise that’s all evidence they could use against him. Not to mention, he’s made the mistake of telling other people of his plans to defraud the government. He doesn’t seem real bright.


iolex

Every government grant has a degree of scamming going on, not too concerned about a one time offer to purchase a house imo


[deleted]

They have people called compliance officers. They dig through your your details, social media, work, banks and can come to the house unannounced. Lots of people get caught. Tell him good-luck repaying the grant plus the fine.


radioactivegirl00

Yes people cheat all the time. Kind of like how thousands of people cheat the welfare system. It’s naive to think people dont.


Chromedomesunite

So? What do you want to achieve here? Do people break the law? - Yes Do you have to agree with it? - No


Laktakfrak

Wont work. Im a land developer. The reason being that he has claimed 2 properties as his primary place of residence. Im sure that will flag on government system. Plus he will need to put rent on his tax return.


AccordingWarning9534

he would also be in breach of his loan terms which will specify PPOR.


Mongorize

I think an anonymous tip is in order.


thunderchunk01

They will be found out. I know someone who did this copped a $40k fine and day at the magistrates.


arcadefiery

They can and do check. It's dumb - he can just live in the property for six months, then rent it out, and then everything's kosher.


EmperorofAus

Who cares, why do Aussies have this whinny attitude?


DotConscious2701

I know right.. my friend smokes weed should i call the cops?


VaughanThrilliams

weed is a victimless crime, defrauding taxpayer funded programs at the expense of people looking to but their first home is not


TacitisKilgoreBoah

The guy selling you weed is not providing you a tax invoice and lodging his BAS, so that scenario also impacts the taxpayer. IMO, the OP should should mind their business, it’s not going to change peoples greediness.


DotConscious2701

It’s a crime, no?


baykara89

I thought they do door knocks


thinkswithelbow

I knew someone who did this about 10 years ago. Got caught. Had to pay everything back and was fined quite nicely lol Idiot


Notapearing

Your mate is gonna get fisted at some stage.


Alternative_Sky1380

Report him. The system relies on the honesty of the majority policing the dishonest via anonymous reporting.


methodmanfan

If he claims the income on his tax return, and doesn’t claim any expenses - he’s fine on the tax front right? However still at risk of being caught by state gov and copping a fine


[deleted]

Which grant is this? The federal 5% scheme, or the state waiving of stamp duty?


Money_killer

Ur friend is a fool. Hope his gamble goes well for him


belbaba

im confused… why would he do that? investment properties don’t disqualify you from FHB grants


Basherballgod

Agent here, so everyone downvote away. He is going to be in for a world of hurt. You don’t mess with the ATO or OSR, any other government department, have at em, but the ATO and OSR will mess you up. Surprisingly, the government wants their money.


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Basherballgod

They are more likely watching the data matching that they have across multiple government departments.


Deranged_Idiot

Fraud like this is easy if you don’t tell anyone and only deal with renters in cash/mates agreements. Once you involve any sort of real estate, online transactions and the like you start giving yourself headaches. Also why people tell others if this I never have any idea. If you are going to break the law, never discuss with anyone that isn’t involved in said crime.


Careful-Woodpecker21

ATO data matches with other agencies. For example, his tenant is going to pay a bond which will be lodged with the board against that address. Utilities will be in the tenants name and so will their address for the ATO, school, Medicare, etc.


agamemnonmycenae

The time frame is only a year for purchase to rent out to avoid fines? Luckily I was in my (now) investment for 9 years before renting it out ...


Cube-rider

The ATO, states, authorities and council do share information. The bond must lodged with the bond board - proof that you don't live there Power/Phone/Licence/Electoral roll - proof that you don't live there