First Home Owner Grant Act 2000

At 11:30am on 12 April 2000, the Honorary DJ Hamill moved ‘That leave be granted to for an Act to encourage home ownership, and to offset the GST on home ownership, establishing a scheme for the grants to first home owners.’

The initial purpose of the scheme was to offset the effect of the GST on home ownership, by making a one-off payment of $7,000 to eligible applicants. This payment is commonly known as the first home owner grant.

'The initial purpose of the scheme was to offset the effect of the GST on home ownership'

Although it is a Commonwealth scheme, the grant is administered and funded by the states and territories. Royal Assent was granted by the Governor General on 26 May 2000 for the First Home Owners Grant Act 2000 (the Act).

More than 295,000 grants have been paid since the scheme began on 1 July 2000.

 

On 9 March 2001, the Commonwealth announced an additional $7,000 grant for the purchase or construction of a new home.

The additional grant was designed to help the building industry. It was available to first home buyers who entered into contracts between 9 March 2001 and 31 December 2001 to build or buy new, but previously unoccupied homes.

Additional eligibility conditions were introduced, requiring construction of a new home to start within 16 weeks and be completed within 12 months.

On 9 October 2001, the Coalition Government promised that a reduced additional grant of $3,000 would be available for contracts entered into between 1 January 2002 and 30 June 2002 to build or buy new homes.

'The additional grant was designed to help the building industry'

The total amount of money paid in additional grants during this time was $104,591,000.

The following are extracts from the Second Reading speech by the Treasurer, D J Hamill, who introduced the First Home Owner Grant Bill into the Legislative Assembly on 12 April 2000.

'The First Home Owner Grant Bill 2000 seeks to introduce the First Home Owner Grant Scheme in Queensland. The scheme involves making a one-off payment of $7,000 to first home owners who enter into a contract to purchase or build their first home on or after 1 July 2000.

'The commencement of the goods and services tax on 1 July this year will increase the cost of purchasing or building a home, and may effectively discourage home ownership'

The purpose of the scheme is to assist affordability for persons buying or building their first home following the introduction of the goods and services tax. The scheme provides significant benefits to first home buyers. To broaden the application of the grant, relevant interest is not limited to freehold estates. It extends to other recognised forms of secured tenure over the home that is being acquired, including instalment purchases, estates for life, and Crown leases and licences.

In Queensland, the Scheme will be administrated by the Office of State Revenue—OSR. To streamline the application process, OSR may enter into agreements with agents to assist in administration of the scheme.

The Bill contains provisions to reduce the risk of abuse of the scheme. The grant is generally $7,000. However, to overcome scope for abuse of the scheme, where the consideration paid for the home is less than $7,000, the grant payable will be limited to the amount of consideration paid. A grant will not be payable where the home is a gift or bequest to the applicant, that is, where no consideration has been paid.

The commencement of the goods and services tax on 1 July this year will increase the cost of purchasing or building a home, and may effectively discourage home ownership.

The First Home Owner Grant Bill 2000 seeks to encourage and help home ownership, to offset the effect of the goods and services tax on home ownership, by implementing a scheme for the payment of grants to first home owners in Queensland.

'The scheme provides significant benefits to first home buyers'

The grant is intended to reduce the additional cost of home purchase associated with the goods and services tax.  However, like the iniquitous new tax the GST which has spawned this measure, the First Home Owners Grant Scheme, is also iniquitous, with a uniform grant being provided regardless of the financial circumstances of the eligible applicant.

Nevertheless, this measure is an integral part of the Commonwealth’s tax reform package and as such we are obliged to implement it along with appropriate administrative and enforcement provisions to facilitate effective administration of the grant.'

As a result of the Global Financial Crisis, Prime Minister Kevin Rudd outlined a $10.4 billion package to stimulate the Australian economy.

'As a result of the Global Financial Crisis, Prime Minister Kevin Rudd outlined a $10.4 billion package to stimulate the Australian economy'

As part of this package, a first home owner boost was offered in addition to the existing first home owner grant. Eligible first home owners buying an existing home received an additional $7,000, while those building or buying a new home received an additional $14,000. The boost was available for contracts entered into on or after 14 October 2008 and on or before 30 September 2009.

A reduced boost was available for contracts entered into on or after 1 October 2009 and on or before 31 December 2009. Eligible first home buyers buying an existing home received an additional $3,500, while those building or buying a new home received an additional $7,000.

Boost announcement

The following announcement was made by Australia's Prime Minister, Kevin Rudd, on 14 October 2008 at a joint press conference with the Treasurer, Wayne Swan, held to discuss the Economic Security Strategy.

'The third measure, first home buyers. At present, as you’re aware, first home buyers are eligible for a $7,000 grant. The government is concerned about softening demand for housing over time. Therefore, the government has decided to act decisively in this area as well in consultation with industry and with others.

As a consequence, for the duration of 08–09, the first home owner grant will be increased from $7,000 to $14,000. On top of that, first home buyers who purchase a newly constructed home will receive an extra $14,000 to take that grant to $21,000. In other words, a doubling of the first home owner grant if you are buying your first home, a tripling of it if you are buying a newly constructed home.

'This is designed to support activity in the housing sector. And the housing sector is critical in terms of the overall performance of the economy'

This is designed to support activity in the housing sector. And the housing sector is critical in terms of the overall performance of the economy.'