The Queensland Government will today announce plans to scrap the $7,000 first-home owners’ grant and replace it with a $15,000 handout only available for those first-home owners buying a new home.
The details of the changes to first-home owner handouts, leaked to the Courier Mail, will be announced by Queensland Treasurer Tim Nicholls todaywhen he delivers the 2012-13 state budget at 2.30pm.
It is less than the $17,000 available to first-home owners buying or building a new home under the previous Bligh government, who were eligible for the $7,000 first-home owners ‘grant and the $10,000 Building Boost.
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The Building Boost ended on April 30 (applications could be lodged up until August 30) and was available to all classes of buyers.
The Queensland changes mirror a similar move by the NSW Government in its June budget, which will mean the end of the $7,000 first-home owners’ grant on October 1, replaced by a $15,000 handout for those buying a new home, including homes bought off the plan.
The changes to Queensland first-home owner grants follow the decision by Queensland Premier Campbell Newman to reinstate the transfer duty home concession scheme from July 1.
It provides a concessional stamp duty rate of 1% up to a value of $350,000, with stamp duty charged at normal rates for the remaining value of the home purchase.
The Real Estate Institute of Queensland (REIQ) expressed disappointment at the decision and warned that thousands of Queensland first-time property buyers might delay purchasing their first homes following the scrapping of the long-standing handout.
“REIQ analysis of Office of State Revenue (OSR) figures show only 24% of first home buyers opted to buy a new home when the First Home Owners Boost, which featured up to $21,000 for new-builds, was in play during the GFC,” says REIQ chief executive Anton Kardash
The REIQ expects the decision to remove the $7,000 grant in favour of a $15,000 grant for new homes will impact the majority of prospective first-home buyers.
”The main reason for this is that new homes are usually too expensive for first-time buyers and are often located in outlying suburbs where young people do not necessarily want to live.
“New units and townhouses can also be more expensive than established and often have higher body corporate fees than older apartments.”
Kardash says the removal of the grant failed to take into consideration the complexity of the real estate market and comes as OSR figures show that over the June quarter more than 5,400 first-home owner grants were paid in Queensland, compared with 4,000 over the same period in 2011.
”The first-home buyer segment of the market has been one of the few positives over recent times, so we are likely to see their level of activity decrease significantly once the grant is removed next month,” says Kardash.
Not surprisingly, the announcement was welcomed by residential developer Stockland, which described it as a “massive shot in the arm for the state economy” and one that would “underpin the future of the state’s housing industry” and provide thousands of jobs.
“We fully support the Newman government’s critical boost to the Queensland housing market – it is good news for the entire state because it will increase confidence, generate thousands of construction jobs, and bring home ownership within reach of more young Australians,” says Stockland Queensland general manager Kingsley Andrew.
“An extra $15,000 is a significant saving for first home buyers and coupled with no stamp duty, today’s announcement creates an unprecedented incentive from the Queensland Government.”
This article first appeared on Property Observer.