Home' API Magazine : May 2014 Contents 104
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In Tasmania, eligible buyers currently
receive a one-off $7000 payment under
the First Home Owner Grant Act 2000.
The grant was established to offset the
effects of the GST, and it isn’t means
tested, so it’s been a welcome leg-up to
those stepping into property ownership.
If you’re keen on building a new home
or purchasing off the plan, the First Home
Builders Boost (FHBB) provided additional
funds too. If buyers contract with their
builder or developer between November
7, 2013 and December 31, 2014, then an
additional $23,000 is theirs.
There are, however, changes afoot.
In its 2013/14 Budget, the Tasmanian
Government announced the end of the First
Home Owner Grant (FHOG) for properties
contracted after July 1, 2014. While the
FHBB will continue, anyone intent on
owning an established home will have to
fend for themselves.
Adrian Kelly, president of the Real Estate
Institute of Tasmania (REIT), says it’s
another blow to the property market.
“We’ve only seen two quarters of sale
increases (to the end of 2013), and that’s
only been those two quarters out of the last
six years,” he says.
“I suspect we’ve turned a bit of a corner,
but let’s just take it easy until we maybe
get through another 12 months of trading.”
Kelly refutes the argument that the
grant had been creating a false boost
to property prices. He says when it was
first introduced, the property market
was already improving, but times are
“There’s a lot of vendors down here that
actually do want to sell, so that sort of
argument doesn’t hold water any more.”
The State Government is looking for ways
to save money, according to Kelly, but he
believes the FHOG removal is a short-
sighted approach to book balancing.
“In a lot of cases they (first homebuyers)
push the second homebuyers up through
the cycle and they buy something and
then they push the third homebuyer and
the third homebuyer buys something... so
whilst government may have saved $7000
in the first transaction, they would have
picked up a whole lot more stamp duty on
the other transactions on the way through.”
Rob Zubin, principal at My Property
Hunter, agrees the loss of flow-on
transactions will mean a softening in the
state’s big markets.
“It’s going to impact on our Tasmanian
market and specifically Hobart and
Launceston – your main residential areas.”
Kelly says the REIT isn’t opposed to
changes overall, but feels any reductions
in something like the FHOG should be
“We wouldn’t have a problem with the
grant being removed completely if there
was something at the other end of the scale
such as looking at stamp duty down here,
which is a state-based tax.
“Stamp duty is a large amount of money
to have to be found and quite often for first
homebuyers it’s the difference between
being able to purchase or not.”
Zubin says a change in the threshold
would be a great first step.
“You have stamp duty in New South
Wales that kicks in at a few hundred
thousand, in Tassie it’s like $20,000 when it
kicks in and it hasn’t moved for yonks.”
Kelly notes that while the FHBB could be
considered as a trade-off for the loss of the
FHOG, a close look at the numbers reveals
this only assists a small percentage of the
state’s first-time property buyers. Most
want an established home.
“It’s a great initiative, but in Tasmania the
number of first homebuyers who actually
choose to build is less than five per cent.”
Kelly says only around 40 people have
taken up the FHBB since it was introduced,
and of those, half bought property that was
already built due to guidelines that qualify
new properties that are finished but have
never been lived in.
“What the government wanted to do
was increase employment in the building
and construction industry, so it was a bit
silly that they were able to buy something
that had already been built because that
didn’t create any more jobs. So the cynic
in me says this was something that was
put on the table knowing we had a State
Government election coming up.”
When API spoke to Zubin a few weeks
before the election – which the Liberal
Party went on to win – he said the grant
hadn’t been put on the political agenda.
“I’m not aware of any discussion that’s
happened in the last six weeks about the
property market in any way.
“That could have been a platform for
one of the parties about stimulating
economic activity and growth and buyers
and development and turnover and churn
and just making things happen, but when
you think about it, it’s been noticeable by
its absence.” API
Upcoming changes to the First Home Owner Grant in Tasmania could hurt a recovering market.
æIt’s going to impact on our Tasmanian market and
specifically Hobart and Launceston – your main
residential area.Æ Rob Zubin
THE STATES // TAS
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