If you are considering purchasing your first home, you should familiarise yourself with recent changes to the first home owner grants.
Over the past year, many state governments have been cutting grants for established homes in an attempt to boost the building sector. Queensland, NSW, Tasmania, South Australia, Victoria and the ACT have all removed their grants for purchasing an established home.
The Victorian Government will increase the first home owner grants to $10,000 for newly constructed homes from July 1, 2013. Stamp duty has also been discounted by 40%. However, the $7000 grant available for established home purchases is no longer available.
According to the Treasurer Michael O’Brien, these changes will mean that first home buyers who purchase a $400,000 home will save over $16,500.
New South Wales
Currently, first home buyers are eligible for a $15,000 grant for newly constructed homes and it has recently been announced that this grant will be extended until 1 January 2016.
Originally, this grant was to be reduced to $10,000 on 1 January 2014, however, now first home buyers have an extra two years to either build or purchase a new home.
Despite increases in these first home owner grants, many are unhappy with the changes. Existing dwellings have been a popular choice for first home buyers as they are usually in prime locations closer to work and other necessities and are often less expensive.
The grants have a purpose of not only providing financial assistance to first home buyers, but also help boost the property industry. However, the number of first home buyers in the market industry is close to the record low at 14.3% in April 2013. Although the Government is attempting to help both first home buyers and the building sector, are these changes the best option for the property industry?