ACT Chief Minister Andrew Barr has rejected calls from Master Builders ACT for a $20,000 home buyer grant for owner occupiers building or purchasing a new home in addition to the ACT’s stamp duty cuts and Federal Government HomeBuilder scheme announced last week.
Mr Barr said the government elected to cut stamp duty over cash home buyer grants as “direct cash grants for property purchases inflate prices, becoming a financial benefit to the seller rather than the buyer”.
He said this approach can worsen housing affordability and provides “a windfall gain to a small few”.
“Ultimately, there is not much point in governments giving buyers a cash grant and then taking it back in stamp duty,” he said.
The ACT will reduce stamp duty for new land single residential blocks and off-the-plan apartment and townhouse purchases up to $500,000 to zero. Off-the-plan apartment and townhouse purchases between $500,000 and $750,000 will see stamp duty reduced by $11,400.
Master Builders ACT CEO Michael Hopkins said the combination of the Federal Government’s HomeBuilder scheme and the ACT Government’s stamp duty cuts is a “winning formula”, with reports of sales offices and display villages being inundated with interest over the weekend, but said other states have been “much more generous”.
He referenced the Tasmanian Government, which has extended the $20,000 First Home Owner Grant to 30 June 2022, making the combined State/Federal benefit $45,000 in addition to some stamp duty cuts.
“If a $20,000 grant was provided by the ACT Government as it has in other jurisdictions, it could super-charge the local home building sector,” Mr Hopkins said.
Mr Barr said the ACT would not be adding home buyer grants to the funding made available by the Federal Government, with Commonwealth modelling showing the “optimistic take-up” in the ACT is expected to be around 450 people over the next seven months.
“We are already concerned that the costs for implementation are going to be significant,” he said.
Mr Hopkins also called on the government to introduce additional measures, such as increased construction of social housing and a renovation fund for upgrades to make homes more accessible or energy efficient.
Mr Barr said further announcements on this would be made in the coming weeks, with public housing and infrastructure projects that maximise local employment to take priority.