FHOG Boost - what will happen after 30 June 2009?

[chilliaa]

Doesnt matter whole lot if the bonsu will be extended.

With the lenders and insurers sensibly running chicken because of concentration risk, the extra 7 k wont do much to make up for the lack of money at 90 % plus LVR.

Nor wil it fix the "back to the future" genuine savings requirements which looklike they will soon be mainsstream again. These were first knocked on the head back in late 2005.

My REA mates tell me that the flow through to the second tier market isnt really happening sd they expected, and I am seeing some anecdotal evidence that a lot of the vendors selling to FHBs are investors getting out, rather than OO people upgrading.

Be interesting to see some stats in 3 to 6mths as to the growth in new construction if any.

I dont see any +ve price pressue in my local turf on new land developments that are mid way between FHOG buyers and upgraders

ta
rolf

mmmm interesting first hand insights, thanks for that.

 

[Rolf Latham]

Sparky

Im thankful that on an average month FHB represent less than 10 % of volume of new loans.

Not that I dont appreciate the new blood, the ability to help and educate new people..............its just that with the credit taps now being turned right down to a trickle for loans at 95 % ( soon to be pretty much all gone), id hate to be relying on the income from that type of loan.

I dont have any stats available to me, but anecdotal evidence from some of my broker crowd suggests MOST CURRENT FHB are 95 % plusers, often with little or no gen savings.

That being the case, I can not see the current numbers of FHOG deals continuing unless credit is provided from another source.

ta
rolf

 

[josko]

That is interesting Rolf.

Like you Sparky, I recently thought that investors waiting will then come into the market. So begins the next cycle. The bottom of the market is then reached, the mum and dad investors cotton on and a few years from now we begin our upward swing as they all rush to buy property.

Regards Jo

 

[keithj]

That being the case, I can not see the current numbers of FHOG deals continuing unless credit is provided from another source.

Some at Business Spectator think it should be an interest free loan instead of a grant.

One solution is to convert the grant into an interest-free loan. Rather than taxpayers making a gift to every new owner, the subsidy could be adjusted into a loan that would be repaid when the property is sold. This is similar to the way the Higher Education Contribution Scheme works for higher education. A better solution would be to index the loan to the lesser of inflation and the home's capital gains, ensuring taxpayers avoid real losses.

Based on historical ownership periods, the scheme could be self-financing after about seven to eight years (that is, the repaid old loans would underwrite new ones). And the Government could condition the public to this superior model by starting with the current boost: extend it for another year but on the basis that it's an interest-free loan. Once it expires, reduce it back to $7000 and convert the entire scheme to the loan-based approach. This should save $1 billion a year from the budget's long-term bottom line.

There remains the vital question of whether the top-up should be extended. When judged against its policy objectives, the boost has been very successful. The Reserve Bank had been jacking up mortgage rates to a peak of 9.6 per cent in August 2008. The unsurprising result was that although Australia's housing market officially entered its downturn in 2004 and started recovering in 2007, it stopped dead in its tracks in 2008.

 

[sash]

I for one is getting rid of one of my FHB units.....I bought it for 171k in 2003 and it probably worth 200k conservtively now. It does have a rent potential of 280pw.

As per my 5-7 year rule....I don't like holding onto non-performing assets. So out it goes. It clearly has not done the minimum 7% gain per annum because if it it owuld be worth about 260k. So I am out of pocket by about 60k!!

I my opinion the FHB stuff is old news....time to think about the high end as this stuff is selling as bargains as people need to get out.

My personal feeling is that we might be in for an adjustment post June 2009 as the squeeze of credit by the banks and the FHB activity settles.

 

[Bud Fox]

http://www.news.com.au/heraldsun/story/0,21985,25374262-661,00.html


So will it go back to the old figures or be removed completely?

I am looking to build my first home , does that mean it goes from 21K(24k?) to 7k or is the hole thing now completely abolished?

Cheers
BF

 

[jazzlobber]

Bud, i haven't read this or seen in confirmed anywhere else but i would expect them to revert to the normal FHB grant if they abolish it completely, surely that would be a political mistake

 

[Aaron Sice]

UPDATE

Rudd has just informed Colin Barnett that it will NOT be extended.

 

[kum yin lau]

Hi Bud, can you not get the contract done before 30 June? Still have 60 days. All you need is the contract date to be before 30 June.

KY

 

[sparky23]

I wonder whether you,your solicitor and the builder can come up with a contract that has a few 'subject to' clauses in it to cover eventualities that may occur whilst you are waiting for the other stuff to happen. At least you could have something with the correct date on it then.

 

[Bud Fox]

Hi Bud, can you not get the contract done before 30 June? Still have 60 days. All you need is the contract date to be before 30 June.

KY

KY

if only i could..

at present, my architect is carrying out some site analysis of my folks property, which is where the 2 bedroom unit will be developed, the time frames I understand are as follows.

Site analysis / Concept drawings
(~3 weeks) : April 23 - May 15

Town planning drawings
(~4 weeks) : May 15 - June 15

Submission Lodged to Council
(~60 days) : June 15- Aug 15

Construction drawings
(~4 weeks) : Aug 15 - Sept 15

Get building quote (signed contract)
(~2 weeks) : Sept 15 - Sept 30

COMMENCE CONSTRUCTION
OCTOBER 1, 2009


From my understanding, after I have obtained a (signed contract) from the builder, provided this falls before June 30, that is the only time I can get the grant+boost..

Is there any other way around it?? KY, correct me if I am wrong , but did you suggest that all that is needed is a pre-June 30 date on the contract? Implying that you can put that date on retrospectively?

If anyone has any creative ideas on how I can maximize my chances of a gov't subsidy before time runs out , that would be greatly appreciated

 

[rugrat]

Sorry, looks like you will miss out.

 

[jazzlobber]

UPDATE

Rudd has just informed Colin Barnett that it will NOT be extended.

yeah but this means he's not extending the current 14k and 21k fhog and revert back to the regular 7k,

if it goes to 0, this will surely cause problems and the fhb market will drop just as quickly as it went up.

 

[The Fence]

That's right Jizz...I can't believe how folks are taking this to be the end of FHOG altogether....it was always going to be the "BOOST" that ends in June (doubling of FHOG) and short term as part of the 1st Stimulus package.....


But...WA seniors will get a $500 fuel card per year from now on.....nice for the oldies!

 

[Propertunity]

But...WA seniors will get a $500 fuel card per year from now on.....nice for the oldies!

OMG, more oldies towing caravans on the roads

 

[Bud Fox]

KY

if only i could..

at present, my architect is carrying out some site analysis of my folks property, which is where the 2 bedroom unit will be developed, the time frames I understand are as follows.

Site analysis / Concept drawings
(~3 weeks) : April 23 - May 15

Town planning drawings
(~4 weeks) : May 15 - June 15

Submission Lodged to Council
(~60 days) : June 15- Aug 15

Construction drawings
(~4 weeks) : Aug 15 - Sept 15

Get building quote (signed contract)
(~2 weeks) : Sept 15 - Sept 30

COMMENCE CONSTRUCTION
OCTOBER 1, 2009


From my understanding, after I have obtained a (signed contract) from the builder, provided this falls before June 30, that is the only time I can get the grant+boost..

Is there any other way around it?? KY, correct me if I am wrong , but did you suggest that all that is needed is a pre-June 30 date on the contract? Implying that you can put that date on retrospectively?

If anyone has any creative ideas on how I can maximize my chances of a gov't subsidy before time runs out , that would be greatly appreciated

Sorry, looks like you will miss out.

For those interested, I have recently found out that I do qualify for FHO Boost, even though I will have run out of time to get a building contract signed before 30 June 2009. The way around it is get a contract drawn up where I can buy 'off the plan' and it needs to stipulate that completion date will be on or before Dec 30 2010.

As per point D below, highlighted in red.

I think I will go out celebrate with a couple of drinks on Rudd.

I hope this is of some help to any one who had the same kind of inquiry.

Anyone in this boat as well?



From 'Addendum for First Home Owner Boost Scheme'

1. When does the $14 000 Boost payment apply?

The First Home Owner Boost (FHOB) is a Commonwealth Government initiative, administered by the Territory Revenue
Office (TRO). FHOB provides an extra $14 000 to the existing $7000 First Home Owner Grant, for the purchase or
construction of eligible new homes where the contract is made, or in the case of owner builders, where construction
commences, between 14 October 2008 and 30 June 2009, inclusive.
Where the consideration or construction cost* is less than $21 000 the applicant will be entitled to an amount equal to
the value of the consideration.
*Construction costs of the home do not include an owner builder’s own labour.

2. What is a new home?

• The home must have never been previously occupied as a residence, including occupation by the builder, a tenant or other
occupant.
• Where a home is being purchased, it must be the first sale of that home.
• Substantially renovated homes may be considered as a new home. To qualify as a substantially renovated home the sale
must be a taxable supply of new residential premises as defined under section 40-75(1)(b) of A New Tax System (Goods
and Services Tax) Act 1999. It must be the first sale of the home, since being substantially renovated, which has not been
previously occupied as a place of residence, including occupied by the builder, a tenant or other occupant.

3. Eligibility

To be eligible for the $14 000 boost you must satisfy:
• All the eligibility requirements for the existing $7000 First Home Owner Grant. Please refer to the First Home Owner Grant
guide and application form F-HI-001; and
• The additional eligibility requirements in either part A, B, C or D of the addendum.
The application will be considered together with the information contained in your First Home Owner Grant application
form F-HI-001.
Only new home purchases and constructions are eligible for the $14 000 boost.
You are not eligible to claim the boost if the contract (the subject of this application), replaces a contract made before
14 October 2008 to purchase or build the same or a substantially similar home.

4. How to complete the application form

Applicants should complete one of the following parts and the Declaration at Part E:
Part A » to be completed by applicants who have entered into a contract to build a new home
Part B » to be completed by applicants who have entered into a contract to buy a new home
(not being a contract to buy a new home off the plan)
Part C » to be completed by applicants who are owner builders and who have constructed a new home
Part D » to be completed by applicants who have contracted to buy a new home off the plan


Note: If you cannot provide all the information in either part A, B, C or D but consider you may be eligible for the boost payment, please contact our office.
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[Bud Fox]

Sorry, looks like you will miss out.

dont think so

 

[Bud Fox]

Sorry, looks like you will miss out.

First home buyers' given boost in aftermath of State Budget

Article from: Herald Sun

FIRST home buyers looking to buy a newly constructed house have been given a major financial boost in the aftermath of the State Budget.
Regional Victorian families purchasing a new home are now eligible for a $22,500 grant while their city cousins can get an $18,000 bonus.

Premier John Brumby has extended the state payment for another 12 months but skewed the grant towards new homes as a boost to the building industry.

From July 1, Victorian first home-buyers purchasing an existing property worth less than $600,000 will also be eligible for a $9000 grant.

Mr Brumby said the government has invested $125 million to keep the scheme running for an extra year.

"The changes to the First Home Bonus will create more homes and more jobs," he said.

The Housing Industry Association estimates the extension of the grant will result in additional 4300 homes being built, securing 3600 jobs over the next three years.

In the past 12 months, 32,000 Victorians have purchased a new home.

The state bonus payment comes on top of the Federal Government's grant of $7000 for existing homes and $14,000 for new homes.

But unless it is extended in next week's Federal Budget, this boost expires on June 30.

Ok, so noone, it seems, is missing out for another 12 months.

...while their city cousins can get an $18,000 bonus.

So let me get this right, if I am building a new house, and its my first home, and I enter into a contract with builder after July 1 then I get :

18,000 (FH Boost) +
9,000 (FH Grant) +
3,000 (FH Bonus)
30,000?

From July 1, Victorian first home-buyers purchasing an existing property worth less than $600,000 will also be eligible for a $9000 grant

What I am not sure about is when this 18K and 9K kick in? Both from July 1?

But unless it is extended in next week's Federal Budget, this boost expires on June 30

This is where its gets confusing. I thought "Regional Victorian families purchasing a new home are now eligible for a $22,500 grant while their city cousins can get an $18,000 bonus" means that it has been confirmed? But the above quote means that boost may still expire??

But unless it is extended in next week's Federal Budget, this boost expires on June 30

So does that mean that if I lock in a contract to build before June 30 2009 then I get the 18K and just get the 7K?

And what it also suggests is that if I wait to after Jul 1 2009, I get a 9K grant, and possibly only a 14K?


Sh*t I am confused.

As you have probably decuded from my questions all I care to know is how much to I get if I lock in a contract today versus locking in a contract post July 1

 

[Bradsdad]

This may assist Bud....

The Victorian Government has announced an increase in the First Home Bonus for new homebuyers.

From July 1 2009 the First Home Bonus will entitle eligible home buyers to a payment of $2,000 for established homes or $11,000 for new homes.

The Bonus previously provided $3,000 for established homes and $5,000 for new homes. The First Home Bonus will be available for the purchase of homes up to $600,000.

The above is direct from the SRO site http://www.sro.vic.gov.au/sro/SROWebSite.nsf/index1.htm

Hope that clears up any confusion. Give me a HOY if needed and more than happy to help.


Regards
Steve

 

[Bud Fox]

Ok, like I always do, I think I found the answer to my own question before someone else was to enlighten

(i should start a forum for myself to , er, myself)

So for anyone interested, here is a list of what you get.