In WA’s 2015 budget, first time buyers wanted to purchase an established property will loose the ability to tap into the $3,000 FHOG. It had already been reduced for established buyers from $7,000 to $3,000 in 2013. However, the FHOG remains unchanged at $10,000 for those wanting to build their first home. Treasure Mike Nahan said the change was in line with the State Government’s policy objective of focusing financial support on residential construction. Cutting the grant for first time buyers purchasing established homes will be a saving of about $109 million for the State Government over four years.
In other changes, whilst stamp duty concessions for first home buyers of both new and established homes remain unchanged, a new $300 flat land tax scale will come into effect in 2015-16 for land with an unimproved value of between $300,000 and $420,000. This new “flatter” land tax scale is expected to raise an additional revenue of $184 million in 2015-16 and about $826 million over the next four years. Those properties with an unimproved value of less than $300,000 will be exempt.
We think FHOG should be abolished entirely because it distorts the market, but the removal from established dwellings makes perfect sense. You can read our background discussion on why FHOG’s are bad news here.
