Associate, Lisa Nguyen and Lawyer, Chanelle Caretti discuss recent changes to the First Home Owner Grants in New South Wales, Victoria, Queensland and South Australia.
New South Wales
Earlier this year, the New South Wales State Government announced changes to the First Home Owner Grant (FHOG) which saw it increase from $7000 to $15,000 for buyers of new properties priced up to 650,000 effective from 1 October 2012. Whilst this is good news for some, the changes also saw the end of the $7,000 FHOG for existing or established properties - which had been in operation since 2000.
Similarly, the Queensland State Government also announced an increased $15,000 First Home Owner Construction Grant for new homes, new off the plan purchases and newly constructed homes, which also saw the end of the $7,000 grant for existing or established homes effective from 11 October 2012.
On 15 October 2012, the South Australian Government followed suit announcing that it was retargeting the first home buyer assistance by:
- increasing the FHOG from $7,000 to $15,000 for contracts entered into on or after 15 October 2012 and ongoing with no end date yet specified
- reducing the FHOG for existing or established homes from $7,000 to $5,000 until 30 June 2014 when it cease to exist, and
- replacing the $8,000 First Home Bonus Grant with an $8,500 Housing Construction Grant for all new homes constructed.
Victoria has not as yet made changes to its FHOG scheme which still remains at $7,000 for homes purchased or constructed under $750,000. Victorian first home owners could also be eligible for The First Home Bonus of up to $13,000 so long as the value of the property does not exceed $600,000 (for contracts entered into between 1 July 2009 and 30 June 2012).
Reforms to the FHOG schemes in each state indicate an urgent attempt by State Governments to boost the housing construction industry and stimulate the property sector. Specifically, the South Australian initiatives followed the revelation that the number of new dwellings built in South Australia had declined by 185 in the last financial year with only 8,545 new homes approved down from 12,560 in 2009-2010. It was forecasted by the Housing Industry Prospects Forum that without the new assistance, South Australia’s new home statistics would likely fall a further 10% in 2012-2013.