THE Queensland government will more than double the grant for first home buyers who purchase new properties, but a grant for existing homes will be axed.
The new arrangements will be part of the Newman government’s first budget, to be handed down on Tuesday.
The government said the new grant structure was about stimulating activity in the construction sector, which it has named as a key part of its economic recovery plan.
The $15,000 First Home Owner Construction Grant, replaces the $7000 first home owner grant, and will apply for first homes that are purchased new or off the plan from September 12.
First home buyers purchasing existing homes will have until October 11 to finalise contracts and claim the original $7000 grant.
Premier Campbell Newman said the focus on new properties would boost construction activity, entice more people into the property market, and make home ownership more affordable.
“This is now the most generous ongoing first home owner grant in Australia,” he said in a statement today.
Treasurer Tim Nicholls said the grant was about boosting confidence in the construction sector.
“We’ve already wiped up to $7000 off the cost of buying the family home by reinstating the principal place of residence transfer duty concession,” he said.
“The first home owner construction grant is another component of our positive plan for this vital sector, which creates jobs for Queenslanders.”
Mr Newman said the government had responded to industry concerns in changing the original first home owners grant.
Defending the changes, the premier noted the Master Builders Association had lobbied the government on behalf of the construction sector.
“The property and construction industry has seen very high unemployment in recent years and this is a targeted initiative to get it going again,” he told the ABC.
The Property Council of Australia welcomed the changes, saying it would provide much needed stimulus in the construction and residential development sectors.
“A dollar spent on a new dwelling has a significant and far-reaching multiplier effect in the community, particular in terms of jobs and retail spending,” Queensland executive director Kathy MacDermott said.
The council, which represents property developers, investors and managers, said it was hoping the government would use the budget to announce a comprehensive review of all state taxes.
“We do need major reform around our property taxes, including stamp duty,” she said.
But REIQ chief executive Anton Kardash says the government should brace itself for disappointment.
He says history has shown first home buyers prefer established homes, even when more generous grants are available for new properties.
He said that during the global financial crisis, the best grants deal for existing homes was $14,000, compared with $21,000 for new properties.
“But if you look at the data for that period, 76 per cent of people still bought established properties,” Mr Kardash said.
“Despite being offered an extra $7000 on new properties, people just opted not to do that.”
He noted there was little available in the new home market for $350,000 or less – the price bracket where first home buyers were active.
SOME FACTS ABOUT THE NEW GRANT ARRANGEMENTS:
- $15,000 for first home buyers of new and off-the-plan properties applies from September 12
- $7000 grant for first home buyers of existing properties to be scrapped from October 12
- New $15,000 grant applies to newly constructed homes, or properties bought off the plan
To be eligible, first home buyers must:
- Make the property the principal place of residence within one year of taking ownership and live there for at least six months
- Not sell the property within a year of moving in
- Buy or build at a value under $750,000
