Australian Property News

SA building boost welcomed but $575,000 cap ‘disappointing’

Posted on Friday, September 17 2010 at 10:54 AM

South Australia’s doubling of the First Home Owners Grant for new properties is welcome but first homebuyers of established properties and other investors have been short-changed, according to the Real Estate Institute of SA.

Institute chief executive Greg Troughton said the decision announced in yesterday’s State Budget to restrict the first homebuyers’ grant to properties below $575,000 didn’t reflect the market.

“Doubling the first homebuyers’ grant for new homes is welcomed and will help boost stock and increase jobs,” Troughton said. “However, capping the grant at $575,000 for established properties is disappointing and will soon be unrealistic as house prices continue to rise.”

He said the cap wasn’t much above the current $410,000 median house price for Adelaide.

“This will restrict many first homebuyers from purchasing in certain areas and getting a home big enough to house their families,” he said. Troughton said it was also disappointing further property taxation relief wasn’t included in the Budget.

“Stamp duty and land tax continue to burn a hole in homebuyers’ pockets and boost government coffers,” he said.

“However, we understand it was a restrained budget as the State continues to recover from the GFC (global financial crisis).”

“We are grateful for the increase to the land tax threshold to $300,000 that came into effect on July 1 this year and look forward to further working with the government to extend this relief in future budgets to encourage people to invest in property.”