“Absurdity”: One Rule Hindering First Home Buyers from cashing in on $10,000 Grant

03rd Jul, 2024 | Articles, First Home Buyer

In this article:
Mark Bouris is calling on state and federal governments to make changes to fix the housing crisis.

By Mark Bouris

There’s a long list of solutions to the housing crisis. But when discussing them we have to be realistic.

Because change is hard. That’s why we have to find solutions that nobody can oppose.

That way we can get the ball rolling – without getting bogged down in politics. So here are two simple ideas that will help our young people get onto the property ladder.

Have you heard of the First Home Owner Grant (FHOG)?

The FHOG offers $10,000 for eligible purchasers buying a new home or apartment valued at $600,000 or less. But there’s an issue with the program.

Did you know that the First Home Owners Grant only applies to apartments with a floor area greater than 50 square metres? So young people who are looking to buy a one-bedroom or studio apartment, won’t be eligible for the FHOG.

I was contacted by a young professional who was looking to buy a studio apartment in Sydney’s inner-west for $450,000. It had a floor area of under 50 square metres.

As a result, he wasn’t eligible for the First Home Owners Grant – which would have enabled him to make the purchase. He’s now on the verge of giving up altogether.

How is that fair?

By the way, it is much more difficult to get a loan for an apartment with a floor area of under 50 square metres. Most lenders won’t even consider it. That should change too.

Why should someone looking to buy a mansion have a better shot at getting a loan than someone who wants to buy a studio apartment? It’s not fair.

Here’s another example of something that should be changed.

Do you know how expensive it is just to be looking for a property to buy?

Say you’re looking for an apartment, and you ask for the strata report upfront. That way you can be sure you don’t get any nasty surprises after you put in an offer and put down a deposit.

Well normally, you’ll have to pay a $300 fee just to see the strata report!

How is that fair?

It’s like going to buy a car – and the car dealership charging you $300 just to see the car’s service history. You’d tell the dealer he’s dreaming!

Now think about this: The property market is so competitive at the moment. We all know that.

So most people who are looking to buy an apartment are viewing apartment after apartment. It’s so tough out there that some people are looking at up to 20 different apartments at a time.

So say you want to see each apartment’s strata report before putting in an offer and paying a deposit.

Get it right from the start with professional help.

Well, you’ll be thousands and thousands of dollars out of pocket. To see the strata reports of 20 different apartments, it’ll cost you $6,000.

This is the absurdity of the property market in this country. It’s why so many young people are giving up.

And it’s why we need change.

So let’s stop charging first-home buyers to see a strata report. Let’s allow the First Home Owners Grant to apply to properties with a floor area of under 50 square metres.

It’s common sense. It can be done with a flick of a pen.

Article originally published by Yahoo Finance. 

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