Queensland doubles first home owner grant to $30,000
First home buyers in Queensland will be able to access $30,000 under a new scheme that has doubled the first home owner grant.
The Queensland government today announced the grant would apply for new builds under $750,000 until mid-2025.
Premier Annastacia Palaszczuk said it was part of a raft of measures intended to ease cost of living pressures.
“I want to see home ownership rates continue to rise,” she said.
“I hope this puts the dream of owning a first home within reach for more Queenslanders.”
Property prices across the nation have reached an all-time high and interest rates are placing extreme pressure on households.
The new grant will come into effect on Monday and can be used for a granny flat or regular home.
The extra cash is coming from increased taxes for the mining sector.
“We can only do this because we’re making sure coal companies pay their fair share,” Palaszczuk said.
So, who can claim the Queensland First Home Owner Grant?
To claim the $30,000 grant, you must be 18 years or older, as should any co-applicant.
You both must be Australian citizens or permanent residents and you cannot access this grant if you’ve already received a First Home Owner Grant in the past or owned residential property.
The grant cannot be used for the purchase of investment properties, and you must live in the home you’re buying or building for at least six months.
You must be buying or building a new home valued up to the threshold of $750,000. The home can be a house, a unit, a duplex or a townhouse.
The grant also applies to a granny flat built on a relative’s land.
Where can you build a granny flat?
The granny flat could be built on land owned by your parent, grandparent, child, stepchild, sibling or the spouse of any of these people.
The landowner must seek approval from the local council and must ensure the dwelling complies with building code requirements.
But who owns the granny flat?
The granny flat exists as a secondary dwelling on the land owned by the relative, so it doesn’t exist as a separate title.
But the First Home Owner Grant recipient will have a right to occupy the granny flat as their home on the land owned by the relative.
This will be assessed by the Queensland Revenue Office and would typically be demonstrated by a statutory declaration and a written agreement between the applicant and their relative.
Matthew Raven, chair of the Queensland Law Society’s property and development committee, said unless the granny flat was a moveable dwelling it would belong to the owner of the land.
“Whatever happens to the land the granny flat goes with it,” he said.
“So if it is sold by the land owner the buyer would take the granny flat, if they die then it would go in accordance with their will, and if a mortgagee stepped in to exercise power of sale then they would be able to sell the land including the granny flat to someone else.”
Are construction costs still climbing?
Yes. But during the September quarter, CoreLogic observed a slowdown in its construction cost index, which returned a quarterly growth rate of 0.5 per cent nationally.
That was the smallest lift since the three months to June 2019.
Of all the states, Queensland saw the highest quarterly increase in construction costs at 0.8 per cent.
On an annual basis, CoreLogic observed costs increased by 4.8 per cent in Queensland.
CoreLogic’s head of research, Eliza Owen, said the slowdown in new dwelling approvals could relax the demand on materials and labour, further stabilising construction costs.
Master Builders Queensland welcomed the First Home Owner Grant boost and said there was an emerging capacity to meet demand for residential construction in Queensland as approvals slowed.
But the Real Estate Institute of Queensland (REIQ) said it was the wrong lever for the government to pull.
It warned the grant could bring forward high demand and again put pressure on the cost of building supplies and the ability to access tradespeople.
Where will these homes be built?
Up to 12,000 eligible applicants can claim the First Home Owner Grant to purchase or build a new home.
However, the initiative comes during a time when Queensland has limited available land.
The REIQ says the south-east corner needs more than 40,000 additional homes built each year, while the Queensland government itself aims to build 900,000 new homes in the south-east corner by 2046.
Amendments to the Planning Act — giving the Queensland planning minister more power to acquire land for specific purposes and the creation of a new zone for developments — are being considered by the State Development and Regional Industries committee.
The government said the bill would open under-utilised land, unlocking supply.
Will incentives inflate house prices?
For future home buyers like Ms Colgan, options include waiting and saving or trying to buy a home with a deposit as small as 5 per cent, which then incurs lenders mortgage insurance (LMI) that adds thousands to the mortgage.
Borrowers can also apply for one of 35,000 First Home Guarantee places and have the federal government guarantee the home loan, pending certain conditions.
Economist Saul Eslake said incentives like the First Home Guarantee and the First Home Buyer Grant only hurt people like Ms Colgan in the long run.
“We have almost 60 years of evidence that these schemes don’t do anything to increase home ownership rates, especially among younger Australians, but they do increase house prices,” Mr Eslake said.
“Anything that allows people to pay more for housing than they would have been able to without these schemes results in more expensive housing — not in more people
owning the housing, and this is just the latest example.”
Queensland Treasurer Cameron Dick said he did not expect the changes to the First Home Owner Grant to inflate home values as it only applied to new homes and builds.