A proposal from Mr Steven Ciobo, the chairman of the coalition's backbench Treasury committee: He believes that the First Home Owners Grant should be doubled. It should be increased from $7000 to $15,000. He says the Government should act because buying a house is beyond the reach of many Australians. He advocates a means test and a cap on the scheme, of which the current scheme has neither. Under the proposal, the grant would be phased out when the household income was more than $100,000. There would be no help when the income reached $125,000. He says that the value of the grant should be linked to the cost of the average home in Australia’s most expensive city - Sydney. First homeowners should also enjoy a “significant reduction” in stamp duty imposed by State Governments on property transfers, according to Mr Ciobo. “Those on lower incomes are struggling to save a deposit for a home,” he says. “Nearly 9% of Australians spend one-third of their pay on rent and simply don’t have the capacity to put additional money aside.” Well, he's right, in that it's certainly now a struggle, but I don't think that doubling the grant is the answer. When it was first introduced, it was almost solely responsible for the boom like activity that followed, as first home owners saturated the market and consequently forced prices up rapidly. As well as this, where would he expect the extra funding to come from? I'm not sure investors could stand any further taxes on already heavily hit investment properties, what with land tax, GST, capital gains etc.
Indeed - even with a means test, I still believe the market would simply adjust to soak up the extra capital floating around from the FHOG (ie prices would go up by around 8K on average !!)
Ah the poor old first home owner. They could always do what I did and buy a 40 square metre flat and build up some equity before they whinge about the price of their $650k Mc Mansion.
Or do what I did and buy in one of Australia's cities that isn't in the top-20 most expensive in the world first (Adelaide is #89 in this list, Sydney is #20)
Hmmmm. So give them 15k, pay no stamp duty in NSW (and make an unfair land tax instead) - give people a 100% loan through RAMS. And there are still complaint's its too hard to purchase a home in Sydney What more do they want ????? When we purchased our 1st PPOR , we needed 20% deposit - interest rates were 10.5% - and no 1st home owners grant at all (12 years ago). The stamp duty - we got a 30% reduction. Thats it. I am beginning to think its never been easier to buy your 1st home. Go to Campbelltown, Windsor, Penrith - and you can buy for 300k. Its not that difficult. Upgrade later in time. Simple !!!!
And therein lies the problem. People expect to live in a relatively expensive suburb from the very beginning rather than slowly upgrading. Once again, it's the way of the world - people want everything...NOW!!
Well our first PPOR was actually in Brisbane, when prices were a wee bit cheaper We paid a grand total of $145K for a nice 4 bd brick home in a lovely suburb. At the time, we considered that enough! How times have changed. I know that FHO's have it tougher, especially here in Sydney, but I still don't think that more handouts is necessarily the answer to increasing their affordability. Why not allow the market to take it's natural course, rather than artificially stimulating it at a time when it needs a break?
