Using Housing Allowance to Purchase Property

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Colonel Mustard
Posts: 2
Joined: Fri Jan 31, 2020 8:12 am

Using Housing Allowance to Purchase Property

Post by Colonel Mustard »

Long time lurker, first time poster.

As the subject line indicates, I have a question about using one's allocated housing allowance to purchase property instead of simply using it to pay rent. In my contract there's no mention of any stipulations - it simply lists the allowance amount.

Has anyone heard of a fellow teacher using their housing allowance funds to pay a mortgage instead of paying rent?

In speaking to colleagues, the consensus seems to be that buying a place sounds like a great idea if I stay at my school long enough but could potentially trigger some negative consequences from the school, such as:

- loss of housing allowance because the school infers (but doesn't explicitly say in the contract) that it's only for rentals;
- loss of overseas hire status (though purchasing real estate doesn't qualify a person for permanent residence in my location);
- accusations of sneakiness or fraud for not mentioning that I was using the housing allowance for paying down a mortgage, not rent.

Perhaps I'm making things overly complicated but I'm hoping to tap into some additional insight and expertise to guide my housing search. Thanks!
shadylane
Posts: 133
Joined: Sat Jul 06, 2013 7:11 am
Location: SE Asia

Re: Using Housing Allowance to Purchase Property

Post by shadylane »

Yes I have. The school allowed it.
Heliotrope
Posts: 1167
Joined: Sun May 13, 2018 1:48 am

Re: Using Housing Allowance to Purchase Property

Post by Heliotrope »

Shouldn't be a problem. It's money given to you to pay for accommodation. Whether it's used for rent or mortgage won't and and shouldn't matter to most schools, but that's merely a guess.
But why not just ask your school?
Colonel Mustard
Posts: 2
Joined: Fri Jan 31, 2020 8:12 am

Re: Using Housing Allowance to Purchase Property

Post by Colonel Mustard »

But why not just ask your school?

I'd prefer to keep all options open for now and it's easier to ask forgiveness than permission. I'll most likely wait a bit and discreetly ask colleagues if they have any experience with how HR would handle the issue. Thanks for your reply!
sid
Posts: 1392
Joined: Sat Dec 02, 2006 11:44 am

Re: Using Housing Allowance to Purchase Property

Post by sid »

I’ve had friends who did, and I’ve considered doing it myself. Be open about it. There seems to be nothing in your contract to preclude it, and you risk painting yourself as the sneaky guy for no reason. Do you want the school second guessing you for the rest of your time there?
Rob
Posts: 62
Joined: Mon Nov 12, 2012 3:07 am

Re: Using Housing Allowance to Purchase Property

Post by Rob »

Up until the late 1980's and early 1990's, the school allowed the housing allowance to be used for mortgages at the Singapore American School. The Board got rid of that option for two reasons. First, if the teacher was fired or left the country, the school would be responsible for the mortgage, and that's not what the school is in business for. Second, I think there was a little jealousy that the teacher could actually do that, and the members of the board could not. Nevertheless, a couple of the teachers easily became millionaires doing just that, before it was terminated.

I think you should be upfront with the school with your intentions.
guest5
Posts: 45
Joined: Fri Jan 12, 2007 8:45 pm

Re: Using Housing Allowance to Purchase Property

Post by guest5 »

Rob, Singapore American School has changed their housing policy again. The school will no longer hold leases for the teachers and housing allowance is paid in cash in your monthly check. It may be used to purchase property if you want.
Nexttrip
Posts: 27
Joined: Fri Feb 08, 2008 4:29 pm

Re: Using Housing Allowance to Purchase Property

Post by Nexttrip »

I know a guy who moved around international schools in various countries and would purchase apts. in each location. After living in each for a few years, he would move on and rent out each place (sometimes to other teachers). He would always find out upfront in the interview process if this was allowed. He done well for himself as a result.
mysharona
Posts: 210
Joined: Thu Jan 13, 2011 1:25 am

Re: Using Housing Allowance to Purchase Property

Post by mysharona »

We bank approximately $1300 month of our housing allowance, as long as we can provide a receipt for the total amount they don't ask or care how we spend it.
PsyGuy
Posts: 10789
Joined: Wed Oct 12, 2011 9:51 am
Location: Northern Europe

Response

Post by PsyGuy »

Assuming you have a lack of indication either way there will be two issues: First, the form of your housing allowance. Is it paid in coin directly to you or provided to a property agent, etc. Second, what your reporting requirements are, do you have to provide receipts, is your allowance fixed or based on actual costs. The more your housing benefit looks like salary the safer you are buying property. The more it looks like a reimbursement for actual costs and expenses the least likely an IS is going to be with you using it to purchase property.

What leadership thinks something "looks like" is there issue not one of your character.
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