Scrapping first home owner grant ‘makes no sense’

The Western Australian budget has dealt a blow to first home buyers, who will no longer receive a government grant for established housing.

Treasurer Mike Nahan said the move was a result of the state government’s desire to focus financial support on residential construction.

“The $3,000 first home owner grant for established homes will be removed following passage of the required legislative amendments,” he said.

Dr Nahan said this would bring Western Australia into line with all other Australian states.

“Importantly, there are no changes to the $10,000 first home owner grant for new homes or to the generous transfer duty concessions for first home buyers of both new and established homes,” he said.

Real Estate Institute of Western Australia president David Airey said the government’s logic was flawed, because the oversupplied Perth market doesn’t need more homes.

“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.

“By aiming the first home owner grant to new constructions only, first home buyers who want more affordable, established homes in older suburbs are being disadvantaged.”

Mr Airey said this would create an imbalance in the housing market and add to urban sprawl.

[Related: Government grants remain divisive issue]

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