ACT lifts first-home owner grant to $12,500 but for new homes only from September 1

Sales of existing homes in the ACT may rise over the next three months while new home sales activity will most likely fall over this period, following housing grant changes announced by the ACT government as part of its 2013-14 budget.

From September 1, first-home buyers (FHBs) in the ACT will receive $12,500 if they buy or build a new home or buy one that has been substantially renovated (subject to changes to the FHOG Act currently before the Assembly).

FHBs planning on buying an existing home have a little under three months to obtain the existing $7,000 grant, which now expires on August 31.

Combined with substantial stamp duty savings under the Home Buyer Concession Scheme (HBCS) - available to both first-home buyers and non-first-home buyers and which is to be continued, a first-home buyer in the ACT could save around $28,500 (including around $16,00 in stamp duty savings) if they buy a new home from September 1 for under $425,000.

However, the three month delay in implementing the new $12,500 grant scheme may result in a drop in new home sales until September 1 as FHBs thinking of buying a new home wait to access the new grant.

It may also artificially inflate sales of existing houses and apartments as first-home buyers rush to finalise their purchases before the $7,000 grant expires on August 31.

While the ACT government says the initiative is aimed at improving affordability, it could push up existing house and unit prices as vendors lift their asking prices given the likely increased demand.

House and land developers and apartment developers could also factor in the higher $12,500 incentive into their prices.

The ending of the existing $7,000 grant, the launch of the new $12,500 grant and the extension of the HBCS was revealed ahead of the ACT budget, to be announced today.

It will bring the ACT in to line with NSW, Queensland, Victoria, Tasmania and South Australia, which are all incentivising the purchase of new homes, whilst removing incentives for existing homes in moves aimed at helping the struggling residential construction sector.

Earlier this month the Tasmanian government announced that from July 1, Tasmanian first-home buyers who build or buy a new home (including off-the-plan) will be entitled to a $7,000 FHOG, while those buying an existing home will receive no grant.

The ACT Home Buyer Concession Scheme that was due to expire on June 30.

The scheme offers stamp duty concession to first-home buyers and anyone else purchasing a new home or residential vacant land under certain thresholds.

From 5 June 2013, the income test will be further increased from $150,000 to $160,000 per household.

Under this new initiative 70%of Canberra households will be eligible for the concession against this criteria.

Properties worth under $425,000 will only pay $20 – a saving of around $16,000.

Properties between $425,000 and $525,000 will pay a discounted duty.

From September 1, a purchaser can also be eligible for both the $12,500 handout plus the stamp duty concession.

“For example, an eligible first home buyer who purchases a house and land package worth $415,000 will pay only $20 in stamp duty and will receive a $12,500 cash payment,” says the ACT Revenue office on its website.

The ACT government also announced changes to its Land Rent Scheme, introduced in 2008 to increase access to affordable home ownership by allowing households to lease a block of land on an ongoing basis rather than incur the costs of purchasing the land at a discount rate of 2% (subject to eligibility criteria), and a standard rate of 4%

From October 1 the scheme will be retargeted towards low to moderate income households who meet the eligibility criteria for the discount rate.

From this date, the standard rate will no longer be available to new entrants to the scheme.  However, those already participating in the scheme at the standard rate will be unaffected by this change.

 

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These are the key dates first-home buyers need to diarise:

All dates correct as of June 4 2013.

June 5, 2013 - ACT

From 5 June 2013, the income test  for the Home Buyer Concession Scheme will be further increased from $150,000 to $160,000 per household. Under this new initiative 70%of Canberra households will be eligible for the concession against this criteria. Properties worth under $425,000 will only pay $20 – a saving of around $16,000.

June 30, 2013 - Victoria

The date the Victorian government ends its $7,000 first-home owner grant. The grant is available if the price of the property or construction of the home does not exceed $750,000. An exception to this requirement is where the contract relates to a home that is on, or to be built on, primary production land.

June 30 2013 - South Australia

The $8,000 Housing Construction Grant (HCG) will expire on June 30. It applies to contracts entered into between 15 October 2012 and 30 June 2013, or in the case of owner builders, where construction commenced between 15 October 2012 and 30 June 2013. A property value cap of $450,000 applies.

July 1, 2013 – Victoria

The start of the $10,000 grant in Victoria for newly constructed homes. In addition, the state government will also increase stamp duty cuts of 40% for all first home owners (including those buying existing homes) for homes valued up to $600,000. The combination of a $10,000 first-home owner grant and 40% stamp duty cut means that Victorians buying a newly constructed first home for $400,000 will save over $16,500.

August 31, 2013 – ACT

The $7,000 first-home buyer for existing home purchases ends.

September 1, 2013 – ACT

First-home buyers (FHBs) in the ACT will receive $12,500 if they buy or build a new home or one that has been substantially renovated.

January 1, 2014 - NSW

The $15,000 grant for first-home owners who purchase or build a new home in NSW valued at up to $650,000 will reduce to $10,000 from this date.

June 30, 2014 – Tasmania

Up until this date, Tasmanian first-home buyers of established homes are entitled to a $7,000 grant. From July 1, 2014, the grant is only available to those who buy or building a new home, including off the plan and house and land packages.

June 30, 2014 – South Australia

Up until this date, South Australian first-home buyers of established homes are entitled to a $5,000 grant. From July 1, 2014, no first-home owner grant is available to purchasers of established homes.

June 30, 2014 – South Australia

Stamp duty concessions for first-time buyers who purchase an apartment off the plan in the Adelaide CBD will end on this date. The scheme is available on the transfer of a new CBD apartment or a "substantially refurbished apartment" for a contract entered into from May 31, 2012, to June 30, 2014, capped at stamp duty payable on a $500,000 apartment of $21,330.

June 30, 2014 – Tasmania

The $8,000 First Home Builder Boost Scheme grant available to Tasmanians building a new home (including off-the-plan) if the qualify for the first-home owner grant will end on this date.

September 1, 2014 - Victoria

All first home buyers (whether purchasing newly constructed or established homes) will benefit from a 50% stamp duty concession for homes valued up to $600,000.

June 30, 2016 - South Australia

Partial stamp duty concessions for first-time buyers who purchase an apartment off the plan in the Adelaide CBD will end on this date.