The MFAA has criticised the West Australian government for ‘punishing’ the majority of first home owners in the state budget.
As reported in Australian Broker, the state’s government announced last week that it will reduce the First Home Owners Grant for the purchase of established homes from $7,000 to $3,000, while boosting the grant for those looking to build new homes from $7,000 to $10,000, effective from September 15.
Marco Meloni, state president of the MFAA in WA and principal of Choice Home Loans in Leederville, says that, while the increased grant for FHBs buying new homes is ‘welcome’, he’s ‘very disappointed’ that the government cut the grant on established homes.
“Over 75% of first home owner loan applications are for the purpose of purchasing established properties,” says Meloni.
“Not all first home buyers can or want to build their own homes and many have already contacted us today with their concerns about being effectively blocked from buying a home because of the increased costs. The budget move will also kill off the state government’s Keystart lending program for those purchasing established homes, as they will not be able to afford the extra $4,000 toward their purchase.”
Meloni says that, while the government promises a saving to state revenue of $24 million, stamp duty revenue will fall as the reduced grant means a lower turnover of established properties. This, he argues, has a knock-on effect as home owners selling to first home buyers normally upgrade to more expensive properties, paying full stamp duty on a higher purchase price. These second and third home buyers may now not be upgrading, thus decreasing state government’s stamp duty revenue.
What is especially disappointing to Meloni is the fact that the MFAA and The Real Estate Institute of WA were not consulted about the proposed changes.
The MFAA is now seeking an ‘urgent’ meeting with the Treasurer to review and potentially reverse the decision, which the group says ‘makes it harder for young couples and single people to put a roof over their heads and plan for the future’.