WA budget axes FHOG for established homes

The Real Estate Institute of Western Australia has criticised the decision by the State Government to axe the First Home Owners Grant (FHOG) for established homes in this week's state budget, but welcomed the retention of the stamp duty exemption.  

REIWA president David Airey said being exempt from stamp duty for homes under $430,000 was a huge benefit to all first time buyers. 

However first time homebuyers wanting to buy an established property have lost the $3000 First Home Owners Grant.

It comes after the FHOG was reduced for established buyers from $7000 to $3000 in 2013.

The FHOG remains unchanged at $10,000 for those wanting to build their first home.

And stamp duty concessions for first home buyers of both new and established homes remain unchanged in this year’s budget.

Treasure Mike Nahan said the change was in line with the State Government’s policy objective of focusing financial support on residential construction.

But cutting the grant for first time buyers purchasing established homes will be a saving of about $109 million for the State Government over four years.

Mr Airey said the government’s argument that the FHOG policy was geared towards providing more housing was flawed, because Perth was currently oversupplied with dwellings.

“Supply is not the issue in WA, affordability is the issue and making it harder for first home buyers attracted to existing stock makes no sense,” he said.

Western Australia’s 2015-16 budget showed a significant write down in expected revenues again, largely due to the greater than expected fall in iron ore and oil prices.

With the state’s spending outlook little changed from the December MYEFO, larger deficits are now expected in the 2015-16 and 2016-17 years.