EYE-BALL Guru on – The First Home Owners Grant – the fallout and a reflection on a stupid stupid Government policy …
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– The First Home Owners Grant –
– the fallout and a reflection on a stupid stupid Government policy …
| Author: EYE-BALL Guru |16th Oct 2012 |
|The Howard Government introduced the ‘First Home Owners’ grant to offset the cost of GST on home purchases. The initial grant was set at $7,000.
In the 12 years since the, $2.8 billion of taxpayers funds has used to put buyers in 341,077 homes. The scheme is administered by the States under a Federal initiative, the QLD State claims it funds the grant, but that is disputable because the Feds cover the cost in their annual grants to the States.
Let us think on that $2.8 billion for a moment – is the value and who it has been given to discriminate –
So let us put the use of these funds into a true perspective.
The reason for the grant was originally to offset GST – with the explosion in property prices up to 2007 – Governments (States) saw the need to increase the grant to incentivise home buyers. That kept property prices on the up and at a time when the world property bubble had burst everywhere else due to the sub-prime collapse and then the GFC.
State Governments were using the Federal funds like a bank on a maxed out credit card. They saw building stats and tried to do something to ‘plug a hole’ they saw coming with no thought to the repercussions down the line.
This was mainly Labour Governments across Australia inducing home buyers into over-inflated property prices at a time when it was all about to collapse – the Banks have to wear their responsibility as well – they over valued homes to suit purchase prices and the loans needed to purchase the property.
Mortgage brokers had a field day ad when the shit hit the fan 2009-10 – the grant was still available. Even now Premier Newman is raising the grant to $15,000 on properties valued at $750,000 and there are deadlines attached to make buyers rush their decisions.
Please read the story below:
This policy was introduced with good intentions to offset the GST. 12 years later State Governments are now using it to prop up a building industry – the logic is stupid to say the least – the lawyers, real estate agents, are the ones who end up with the money in their hands – the poor buyers have the grant value tagged onto the loan value and have to pay it back to the Banks with interest.
The policy was misguided from the outset – yes the early buyers who bought homes in the early 2000’s when property prices rose were advantaged.
Since 2007 – all home grants have been used to buy homes that had inflated values and in a falling property market. The poor home owner has been totally screwed.
As if $15,000 is going to make a dint in a deposit or mortgage to help pay for a $750,000 loan. If a buyer can afford to buy a home for that value – they should not be getting assistance from any Government.
Premier Newman’s policy on this increase grant value demonstrates his economic credentials and are on a par with Treasurer Swan.
My major bug is that it only gave some 1.55% of the population any direct assistance – any secondary feed off arising from the home purchase was chewed up ant future capital loss attached to the property.
Just an idea – Howard and Costello could have just made GST waivers for home purchases like they did with a host of other exempt GST items.
This was just about the dumbest policy any Government has ever introduced – although well intended at the outset – nobody had a clue to the real cost and benefit some 5, 10 and even 20 years down the track.
$2.8 billion has just been pissed up against a wall and who will claim responsibility … I would like a $15,000 handout as opposed to giving it to some Lawyer, Real estate agent, or added to a Bank mortgage …
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The EYE-BALL Guru …