The Future of First Home Owner Grant: Will It Continue?
Last year, The Victorian Government established a scheme that would provide support for individuals who have been looking into building their very first house or the house they have been holding off to build for quite some time now due to the impact of the coronavirus or COVID-19. So many changes went on, which also caused uncertainties, especially on future undertakings. The HomeBuilder/First homeowner grant was originally scheduled to end on the 31st of December. Quickly, the filing of all applications was extended until March 31st, 2021.
According to the latest announcement, the expiration of this particular package is set to occur on June 30. This means that the current scheme, which offers individuals building and buying their first property that is priced up to $750,000 may receive a grant of over $10,000 in Metro Melbourne while $20,000 in regional Victoria. Now the big question is, what will happen after the announced due date?
Well, it seems like the government is thinking of extending the scheme past the announced due date, however, no final statements have been made thus far. However, certain discussions are taking place. On May 20, the Victorian budget will be delivered. And since the scheme has been wildly popular, it would make sense to continue past the deadline to be able to accommodate more. The latest figures revealed that 104,000 first home buyers received FHOG in Victoria in 2017, while 143,000 already received stamp duty discounts.
To date, over $3 billion has already been saved by Victorians on purchasing first homes. For this year, the housing market has been predicted a 10 percent rise in the housing market, and experts are saying that Melbourne could have a $1 million median by June this year. This is why there’s an obvious need for an additional First Home Owner Grant.
Unfortunately, not all market experts agree that this grant should go on. One expert said that for the market to become fairer and not overinflated by the incentives and this was one of the causes of the rising house prices. However, the truth is it was needed at a time like this and so many benefited from it.
The Jobkeeper scheme was also one of the initiatives that began to help workers and businesses keep their livelihood. Like the FHOG, the scheme was also extended but there’s always an end to everything.
Now that the Jobkeeper and the First Homebuyer grant are ending soon, will this affect the house prices anytime soon? The answer is no. As far as the capital gains and the negative gearing incentives are concerned, there’s no direct effect caused by the end of these two schemes so it would still make a lot of sense if continued. However, there should be some tweaking involved like removing the $20,000 grant for regional homes.
Owning a house in Australia is definitely expensive without a doubt, but in the past six months, a surge of people choosing to build their very first home was seen. This shows that the industry has and will continue to prove itself to be that powerful engine for the country’s economy. This also proves that any initiatives to support Australians to invest in the construction and building industry must be supported.