Media Releases
HOME CASH - $4000 bonus for first-home buyers
Thursday 5 June 2008
Extra financial help for first-home buyers will be a key pledge in Treasurer Kevin Foley’s seventh Budget today. Under a change of stamp duty concessions contained in the Budget the first-home owner grant will increase by $4000 to $11,000 for most South Australians battling to enter the housing market.
Mr Foley this afternoon will announce the “significant help” for aspiring homeowners as he scraps the first-home buyer stamp duty concession scheme. The concession, which offered a sliding-scale discount on the stamp duty payable on homes up to $250,000, will be replaced by the new $4000 bonus grant.
The payment to be provided on top of the Federal Government’s $7000 first-home owner grant administered but the State Government will be available on homes up to $400,000.
The $4000 payment will phase out between $400,000 and $450,000. It will cost the Government $32 million next financial year and $130 million over four years. The new $4000 state grant will take effect for first0home purchase contracts entered into from today.
Mr. Foley last night said the budget measure was ”a recognition by the government that getting your first home is an expensive and an increasing cost and we should improve the amount of assistance we give”. “We ate streamlining assistance. With state and federal grants, first-home buyers will effectively get as cheque from government of $11,000,” Mr Foley said.
Strict eligibility requirements remain in place for the state and federal grants, including never having owned property before. Grant recipients also must live in the property within 12 months of settlement and occupy the home as the principal place of residence for a minimum of six months.
The Government believes more that 9000 first-home buyers will receive the full $4000 grant during the next year, with almost 95 per cent of all first-home buyers receiving some form of financial assistance.
Treasury estimates that to be almost double the number that would have received help under the stamp duty concession.
Mr Foley last night said the measure was part of a State Government plan to ensure “the Australian dream” of owning a house remained accessible for “as many people as possible”.
The issue if stamp duty relief for first-home buyers had sparked fiery scenes in parliamentary question time.
Opposition Leader Martin Hamilton-Smith asked Premier Mike Rann why young South Australians paid more taxes on their first home than those in any other state or territory.
“A first-home buyer buying a house at the median scheme in Australia”. “But, do you know what? It is not impeding or stopping people buying and building homes,” He said.
Adelaide’s Median house price jumped almost 19 per cent last year to $350,000. It has trebled in the past decade. Some independent experts, however, question the impact of government assistance on increasing housing affordability.
ANZ chief economist Saul Eslake last September warned increasing the first-home buyer grant would not address the housing affordability crisis because is would further boost demand by effectively giving extra cash to buyers. In April, however, the Urban Development Institute of Australia (SA) told a Senate committee inquiry into housing affordability that high taxes and a lack of land were the main problems.
Mr Foley acknowledged “timely” land release as an issue and said a package of significant planning would be announced this month.
“We are acutely aware of the need to continue to the release decent parcels of land for housing,” he said.
“We are the most affordable place in mainland Australia and we have to keep that position.” He said part of the reason for introducing the $4000.
