Grant scheme a winner

Bendigo Weekly | Bendigo Weekly | 15-Sep-2017

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THE state government has urged regional Victorians considering the purchase of their first home to consider their eligibility under the revamped First Home Owner Grant scheme.

Changes were introduced to the scheme in July, meaning eligible regional first home buyers would receive double the previous $10,000 grant to assist them into their new dwelling.

If the home is not in regional Victoria, the grant is $10,000. 

The government expects to deliver $120 million in assistance for first home buyers in regional Victoria in the first year of the scheme.

Under the expanded FHOG, the newly-built home can be a house, townhouse, apartment, unit or similar, but it must be valued at $750,000 or less and be the first sale of the property as a residential premises. 

To ensure fairness, Victorians are not eligible for the FHOG if they or their spouse/partner have already received the FHOG in Australia; owned a home in Australia, either jointly or separately, before July 1, 2000; or lived in a home in Australia in which either of them owned or part owned on or after July 1, 2000, for a continuous period of at least six months.

Changes to the FHOG initiative are also expected to deliver opportunities for local construction jobs and development, and other supporting industries such as home sales, removalists, appliance sales and the like.

In 2016, 11,783 first home buyers across the state (both metro Melbourne and regional Victoria) received the FHOG to the value of $117.6m for newly built homes, of which regional first home buyers benefited significantly.

Regional Victorians can also receive the FHOG and a stamp duty exemption at the same time for a newly-built home.

While established homes are not eligible to receive the FHOG, anyone buying an established home as their first home and you meet the FHOG eligibility criteria (but for the fact that it is not a newly-built home), will be exempt from paying stamp duty altogether (for homes valued at $600,000 or less) or will receive a stamp duty concession (for homes valued at $600,001 up to $750,000) where the  

contract is entered into on or after July 1, 2017.

There’s now also a stamp duty exemption for first home buyers who buy a home (newly built or established) with a dutiable value of $600,000 or less, meaning first home buyers do not pay stamp duty on homes valued under $600,000.

Real Estate Institute of Victoria Bendigo division chairman and Mawby Property director Andrew Murphy said there had been an increase in activity in the local market, whether it was for buyers looking at established homes and take advantage of new stamp duty concessions, or potential buyers looking to purchase land to build their first home.

He said obtaining finance was getting harder for some potential first home buyers, as the banks had tightened their lending criteria and were applying greater scrutiny to their potential clients.

Mr Murphy also said first home buyers looking to get into the Bendigo market were more savvy and better educated about the state of the market and what they wanted to buy.

PH Property director Brad Hinton agreed the changes to the FHOG introduced from July 1 had an impact in the local market.

“There’s been a fairly significant increase both in the amount of inquiry and sales among the first home buyer segment, particularly for entry level housing in the Bendigo region,” he said.

First home buyers buying a home with a dutiable value from $600,001 to $750,000 will be entitled to a concessional rate of stamp duty, calculated on a sliding scale. 

In 2016-17, the state government delivered $73.4m in stamp duty reductions to 10,745 first home buyers in regional Victoria, up more than 80 per cent on the number of regional first home buyers who benefited from stamp duty reductions in a single year (from 2015-16 to 2016-17).

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