South Australia's FHOG to apply to new homes
The South Australian government is changing its first home owner grant scheme, so that the grant will no longer be available for buyers of established homes.From July 1, people in SA buying their first home will receive a A$15,000 grant if they are buying a newly built house, flat or townhouse. The value of the property must not exceed $575,000.The $5000 grant for purchasers of established homes will be withdrawn from that date.The change in South Australia brings it into line with similar changes to grant schemes in other states. In New South Wales, a $15,000 grant is available for first home buyers if they are purchasing a new home or building a home. The grant is scheduled to fall to $10,000 in 2016.Victoria's first home owner grant is worth $10,000 and only applies to the purchase of a new home.Queensland's grant is worth $15,000 and only applies to new homes. The grant is only available if the value of the home is below $750,000.The value of first home owner grants, introduced by the Howard government in 2000 (but existing in various forms before that date), has been the subject of debate. In a paper on Australian housing policy published in December last year, economist Saul Eslake said the grants had done nothing to increase the level of home ownership.Eslake said the only measurable impact of the policy of handing out cash to first home buyers had been to push up the cost of houses.Eslake said the move to reduce grants and limit them to new homes was sensible because it would induce a "supply side response".Opponents of the changes argue that current grant arrangements are a subsidy for developers, allowing them to charge more for their house and land packages. Other critics argue that people buying their first home should be free to choose a property that suits their lifestyle, not one that helps meet government policy objectives.