First-time home buyer grant
 | This article needs to be updated. (October 2009) |
A first-time home buyer grant is a grant specifically for/targeted at those buying their first home — perhaps a starter home. Like other grants, the first-time buyer does not hold an obligation to repay the grant. In this respect, it differs from a loan and does not incur debt or interest. Grants can be given out by foundations and governments. Grants to individuals can be either scholarships or donations.
First time home buyer grants are typically awarded based on a few criteria, primarily financial need and income qualifications.[citation needed]
Many states have initiated grant programs to help lower income residents with the purchase of their first home. The United States Department of Housing and Urban Development (HUD) also provides grants to first time home buyers.[1] Funding for various state first time home buyer grants is nearly always available.[citation needed] In fiscal year 2006, only two states exhausted their budgets for first time home buyer grants.[citation needed]
Australia
A similar program was introduced in Australia from the 1 July 2000, where first time home buyers can receive a $7,000 once off payment to offset the cost of the GST. While the program is offered nationwide, the scheme is funded by the states and territories and subject to respective legislation.[2]
First Home Owners Boost
In October 2008, the Australian government announced a boost to the scheme to alleviate the Global Financial Crisis, in order to stimulate the housing industry and prop up the market. The stimulus consisted of $14000 available to first time purchasers buying or building a new home, and $7000 made available for those purchaseing their first established home. The scheme continued from 14 October 2008 through to 30 September 2009.[3]
Between 1 October 2009 and 31 December 2009 the grants were halved. Those purcahsing or building new homes were eligible for $7000, while those purchasing established homes were eligible for a $3500 grant.[3]
From 1 January 2010 onwards, the Commonwealth scheme ended. However, first home buyer assistance continued via the state funded First Home Owner Grant, worth $7000 for both new and established properties.
| Type | Scheme | Eligible dates | Benefit |
|---|---|---|---|
| Established homes | First Home Owner Grant | 1 July 2000–present | $7000 |
| New homes / construction | First Home Owner Grant | 1 July 2000–present | $7000 |
| Established homes | First Home Owners Boost | 13 Oct 2008 – 30 Sept 2009 | $7000 |
| New homes / construction | First Home Owners Boost | 13 Oct 2008 – 30 Sept 2009 | $14000 |
| Established homes | First Home Owners Boost | 1 Oct 2009 – 31 Dec 2010 | $7000 |
| New homes / construction | First Home Owners Boost | 1 Oct 2009 – 31 Dec 2010 | $7000 |
During the budget announcement for 2011 to 2012, the QLD Government announced a further $10000 QLD Building Boost for new homes, townhouses and units for contracts entered into from the 1st of August 2011 to 31st of January 2012. The QLD Building Boost is eligible for first home buyers, owner occupiers and investors purchasing or building a new home. The total value of the new home must not exceed $600,000 to receive the grant. The aim by the QLD Government is to boost the construction industry that has seen lagging demand over the year.
The QLD State Government as of Tuesday 14th of February decided to extend the Qld Building Boost for a further 3 months. The new end date for the Qld Building Boost is the 30th of April 2012.Building Loans Australia
NSW state Government as part of its budget review for 2012 to 2013 increased the First Home Owners Grant in NSW to $15,000 but took away the stamp duty concession for established homes from first home buyers. The more than doubling of the First Home Owners Grant in NSW to $15,000 started from the 1st of July 2012 and will continue throughout 2013 with the First Home Owners Grant in NSW reducing to $10,000 in 2014. For non first home buyers there is a grant of $5,000 available [1].
Problems with first-time home buyer grants
Because a first time home buyer grant usually pushes up the amount that such a buyer can borrow from a financial institution by more than the value of the grant, in competitive housing markets where a majority of competing buyers will also have access to the grant, the end result is that lower-end houses increase in price also by more than the value of the grant, and first home buyers tend to accumulate more debt than if the grant had not been available. [citation needed]
See also
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