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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.

HIA's Position statement

  1. HIA supports first home owner incentives that can assist a person to achieve home ownership sooner than would otherwise be possible without that support. Incentives that can provide this support include home deposit guarantees, shared equity schemes, grants and stamp duty exemptions and concession.
  2. First home owner incentives should be targeted to households that are able to rent in the private market due to their household income level.

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.
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