June 17, 2011
The cost of buying a new home in Queensland is set to ease in about six weeks when the state government’s building boost grant comes into effect. But other plans to emerge from the Queensland state budget will mean some residents will pay increased stamp duty.
The Queensland Building Boost is a $10,000 grant for individuals over the age of 18, or corporations buying or building a new home in the state that is valued up to $600,000. It will be a $140 million injection into the housing construction sector that will be made available for six months commencing August 1, 2011.
First home buyers will still be eligible for the $7000 first home buyer’s grant.
Outlining the state budget on June 15, Queensland Premier Anna Bligh said the boost is aimed at stimulating the market and creating more building jobs in the state. The move is also expected to rouse the mortgage market.
“I would urge anyone looking to build or purchase a new home, particularly first home buyers, to get in quick and make the most of this opportunity,” Premier Bligh said.
How it will work
Both owners and investors will be eligible to apply for the grant for properties that have not been previously occupied as well as for those that have been substantially renovated.
It’s possible to receive more than one grant, but each must be used for a separate property. Also, each property must be used residentially by the applicant – either for personal use or investment – before being on-sold.
Changes to stamp duty
The state budget also included a 125 percent increase to stamp duty for homeowners, which for a $400,000 property would see an increase from $5250 to $11,825. While first-home buyers will remain exempt from the tax for home purchases up to the value of $500,000.
The increases to stamp duty have raised plenty of criticism including from Liberal National Party leader Campbell Newman, who said the move is a “king hit” for an already lacklustre housing market.
“This stamp duty slug will put the home ownership dream out of reach for many Queenslanders already tightening their belts to pay for Labor-inflicted cost of living increases for electricity, water and rego,” he said in a media release.
Nevertheless, there are many Queenslanders who have been waiting for an opportunity to enter the property market or upscale and the Building Boost Grant may be the key.
But before increasing debt levels in the form of a new mortgage or construction loan, determine how much you can comfortably afford to repay, and factor in a 2 percent rate rise.
For more information about government grants in your state, visit www.firsthome.gov.au or contact the office of state revenue in your capital city.
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