The First Home Owners Grant (FHOG) must be scrapped! Quite simply, it is placing a massive, unnecessary strain on the housing market: strain that is hidden and yet to be felt.
The way the current grant operates, those purchasing a home for the first time can gain full benefits by purchasing a property at or below $500,000 AUD. This maximizes the government bonus of $14,000 AUD for an existing dwelling or $21,000 AUD for a new build and allows for total exemption from dreaded Stamp Duty which is levied by each State and equals approximately 4% of the purchase price, in other words an additional 4% tax paid by buyers for the privilege of purchasing a home or investment property.
Property which should only be selling in the low $400,000 AUD range is benefiting from the massive artificial price inflation as first home buyers overpay, happy that they have used the full Government grant. Once the grant is stopped these homes will decrease in value to the levels they should have been sold for originally, placing massive pressure on those that purchased them for such inflated prices.
Properties worth anything above $500,000 AUD have struggled to achieve the prices they deserve as offers of $500,000 AUD as a maximum have been the norm. Properties with a “true” value of $600,000 to $650,000 have also struggled to achieve offers which reflect the “true” property value and the cessation of the FHOG will help to begin the recovery process that will take some time to complete.
I have long been an advocate of Government spending money on first class infrastructure. I strongly believe that high speed trains are essential throughout Australia, connecting major cities as well as regional cities, which would go a long way toward solving the housing crisis that cities like Sydney face.
I would have preferred to have seen money put into this type of infrastructure than the FHOG, as the benefits would be greater for a longer period, benefiting more people and not been a band-aid solution to a problem which required a lasting solution.
Michael Marquette, Marquette Turner Luxury Homes