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First home owner grants
HIA supports the retention of the First Home Owner Grants (FHOG) for new homes as a way to reduce the GST burden that applies to new homes but not to existing homes.
Monday, 14th May 2018
HIA's Position statement
- HIA supports state governments retaining the First Home Owner Grant (FHOG) for new home construction only.
Background
- First Home Owners Grants (FHOG) were originally implemented as compensation for introduction of the GST, which was applied to new homes but did not apply to existing homes at the point of sale.
- Despite this, over time they were applied across both new and existing residential property.
- The application of a FHOGs to the purchase of new homes only has been shown over time to provide an effective stimulus to the broader economy.
- There are major efficiency gains to be realised from targeting housing policies (including measures directed at first home buyers) that increase the supply of new homes.
- Housing policies targeted at the construction of new homes, in all forms, can effectively increase the overall housing stock for all households.
- Residential building activity exerts a positive multiplier impact through the wider economy.
- The approach by states and territories to focus FHOGs on new home building recognises this benefit.
Policy endorsed by HIA National Policy Congress :May 2002; Re-endorsed with amendments 2013; Re-endorsed 2018.
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