Record year of housing handouts, changes by Aussie governments

Supplied Real Estate Aerial images of Melbourne

A record level of housing handouts and policies have been put in place to jump-start more homes for Australian residents.

Never in Australia’s history has so much been handed out to help taxpayers have homes, with record financial leg-ups going as high as $56k for the average first home in one state.

Record levels of taxpayer funds are now going towards ensuring Aussies have a roof over their heads, including an unprecedented handout foreigners can tap into buying here, with the range of home ownership measures going from significant stamp duty concessions to boosts to first homebuyer grants and guarantee schemes, as well as record highs for rental assistance.

PRD chief economist Dr Asti Mardiasmo said “right now we definitely have the greatest number of policies, covering both demand and supply, and covering a wide range of sectors and asset classes”

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Housing has been the issue of 2024 for all Australian governments including that of Prime Minister Anthony Albanese. Picture: Richard Dobson

“This is an accomplishment by itself, especially as “solving the housing problem” is such as a complex multidimensional matter, that you do need multiple policies to “attack” it from all different angles/corners.”

She said the devil was in the detail of each policy and how that impacts different segments such as property price caps for first home buyers in high cost areas.

“Australia is a decentralised governance mechanism – meaning that each state and local councils have their own powers and ability to create policy. You can already see that there is a different amount provided to first home buyers in different states. This happens with building / construction / housing supply policies too – there could be a set of initiatives at federal or state level, but at the end of the day, the government approving DAs are local councils.”

PRD chief economist Dr Diaswati “Asti” Mardiasmo.

Dr Mardiasmo said overall “we are in a much better place than previous years. There is always room for tweaks, improvement, changes, etc; we would never be at a “perfect mix” – I think we need to let go of this expectation to be honest. Otherwise, I feel we would always be placing blame as opposed to strategising.”

According to the Australian Bureau of Statistics head of prices statistics Michelle Marquardt, without government help rents would have been 1.4 points higher.

“The annual rise in rents of 6.7 per cent was partly offset by an increase in Commonwealth Rent Assistance (CRA),” she said. “Without the CRA changes, rents would have risen by 8.1 per cent in the 12 months to October”.

For househunters looking for a home, the goalposts moved even further away after three capitals saw annual double digit percentage rises in home prices this year – Perth, Brisbane and Adelaide – with multiple governments now forced to take greater action to give buyers a leg up.

Fresh measures have had to be considered to tackle rampaging price rises for homes.

2024/2025 CHANGES:

FEDERAL/NATIONAL:

First Home Guarantee (FHBG) & Regional First Home Buyer Guarantee (RFHBG)

Date: July 1, 2024 – June 30, 2025

• 35,000 FHBG places are available

• 5 per cent minimum deposit

• Individual and joint applicants

• Maximum purchase prices apply.

This measure has been extended, with 35,000 new places made available for the year to June 30, 2025. It allows approved applicants with less than a 20 per cent deposit to bypass lenders mortgage insurance charges.

Housing Australia guarantees to a participating lender up to 15 per cent of the value of the property purchased by approved applicants for this to happen.

But applicants must be owner-occupiers who have not owned property in Australia in the past decade. There are also price caps on the property that it applies to (see table below).

Federal first homebuyer guarantee: What property price thresholds apply. Source: Housing Australia

Family Home Guarantee:

Date: July 1, 2024 – June 30, 2025

Approved single parents or single legal guardians with at least one dependent can buy a home with a 2 per cent deposit with 5,000 places open in the 2024-2025 year.

Help to Buy scheme – shared equity:

Date: 27/11/2024

• 40 per cent government contribution for new homes

• 30 per cent government contribution for existing homes

• Buyers co-own with government

• 2 per cent deposit

• Price capped (Different prices in different cities)

• Open to single people on less the $93,200 or couples on less $125,200 gross annual income.

New federal housing policy:

Foreign Acquisitions and Takeovers Fees Imposition Amendment Act 2024 (Cth) (Amending Act)

Date: Apr 9, 2024

• Minimum application fee payable for the acquisition of an established dwelling (those with a purchase price of $1,000,000 or less) will increase from $14,100 to $42,300; and

• the maximum application fee payable for the acquisition of an established dwelling (those with a purchase price of $40 million or more) will similarly increase from $1,119,100 to $3,357,300.

• the minimum annual vacancy fee payable for the acquisition of an established dwelling (those with a purchase price of $1,000,000 or less) will increase from $14,100 to $84,600; and • the maximum annual vacancy fee payable for the acquisition of an established dwelling (those with a purchase price of $40 million or more) will similarly increase from $1,119,100 to $6,714,600.

Aerial View of Brisbane Financial District

Queensland has one of the best first homeowner grants ever put in place at $30,000.

QUEENSLAND

The Sunshine State has one of the best handouts of all states with the average first home able to tap close to $56,000 in government financial assistance for a $500,000 property this year off a combination of a generous first homebuyer grant of $30,000, stamp duty exemption on a half a million dollar home at $8,750, and using the federal Home Guarantee Scheme to ensure a 5 per cent deposit does not attract lender’s mortgage insurance thus saving over $17k.

First homeowner grant:

Date: November 20 2023 – June 30, 2025 ($30,000)

• Over 18 and Australian citizen

• No income bearing

• Must not have not owned residential property in Aus (lived in or not before 1 July 2000 or lived in after 1 July 2000)

• Able to lease, rent or grant exclusive possession of part of the property – providing lease agreement starts between September 10, 2024 – June 30, 2025 and buyer continues to live in property.

Buyers have the first six months of 2025 to tap the temporary doubling of the first homebuyer grant to $30,000. It expires on June 30, 2025, when it will revert to $15,000.

Only Tasmania matches that level of intensity in FHOG.

Queensland’s $750,000 threshold is also a strong contender to attract interstate action.

Stamp duty: First home concession

Date: June 9, 2024 (Amendments)

• First home concession only applies to a home valued under $800,000.

• Do not have to be an Australian citizen.

• Move in with personal belongings and live there daily within one year of settlement.

The threshold for transfer duty concessions for first home buyers has been extended to $800,000 (up from $550,000) and $500,000 (up from $400,000) respectively for FY25.

That means no duty on homes up to $700k and a partial concession for those between $700k and $800k. The max first home concession is $17,350, up from $8,750 previously.

For those buying land which they build on within two years, the max first home vacant land concession is $10,675, up from $7,175 previously.

Land tax:

Land tax makes up 10.1 per cent of Queensland tax revenue. It has been increased by 1 point to 3 per cent from June 30, 2024 (from 2 per cent), which still puts it below the 4 per cent charged by New South Wales and Victoria. The increase is expected to add $330m over four years to 2028 to state coffers to roll out other measures.

Queensland has higher duty rates for foreign home buyers.

Additional foreign acquirer duty:

This is charged to foreign buyers of Queensland homes and increased from 7 per cent to 8 per cent from July 1, 2024 – bringing the state in line with New South Wales and Victoria. The increase is expected to add a further $90m to state coffers by 2028.

Foreign land tax surcharge:

This charge which applies to all foreign companies, trustees of foreign trusts and absentee owners increased by 1 point to 3 per cent from June 30, 2024 – still below NSW and Victoria’s 4 per cent. It is in addition to the general rate of land tax and will add 330m to Queensland treasury by 2028.

Housing policy: Stage 2 rental reforms

Date: June 6, 2024

RENT INCREASES

• Landlords and agents cannot accept a tenant’s offer to pay rent above the advertised price.

• Rents can only be increased once every 12 months. This period attaches to the property, not the tenancy, so the limit applies regardless of whether there is a change of tenant or lessor.

• These laws apply to all future rent increases going forward, regardless of whether the last increase took place prior to the laws coming into effect.

• The tenancy agreement must state the last date rent was increased.

• If the landlord believes they will face undue financial hardship because they can’t increase rent within 12 months, they can apply to the Queensland Civil and Administrative Tribunal for an order.

PAYING RENT IN ADVANCE

• When a tenancy is advertised, landlords are not allowed to accept an offer to pay rent in advance if the amount is more than two weeks for a periodic tenancy, or one month for a general tenancy.

• However, landlords can accept rent in advance greater than this limit during the tenancy if freely offered by the tenant. They may not solicit or invite rent in advance.

In order to boost the supply of new homes, Victoria has opened up its off-the-plan stamp duty concession to all buyers.

VICTORIA

The state’s attempt to jump-start housing supply has seen the government issue one of the most generous new build measures in its history, wiping out stamp duty across all price thresholds for off-the-plan units, apartments and townhouses.

First homebuyer grant

Continuing policy (no change): A new home purchase can be offset by a $10,000 grant from the state government for first home buyers.

New temporary off-the-plan stamp duty concession

Date: Oct 21, 2024

Dr Mardiasmo said the existing off-the-plan duty concession was previously only available to first home buyers and owner-occupiers “where the reduced property value (or off-the-plan dutiable value) following the deduction of construction costs incurred after the contract date calculated under a fixed percentage method or an alternative method is under $750,000 (for first home buyers) and $550,000 (for other home buyers)”.

The change will temporarily expand the availability of the concession meaning:

• Anyone purchasing an apartment, unit or townhouse in a strata subdivision off-the-plan can claim the concession, not just home buyers; and

• The property value caps will be removed so that the concession is available for apartments, units and townhouses of any value.

This is one of the most outstanding measures dished out to homebuyers in the past year in that stamp duty is wiped for all buyers of off-the-plan units, apartments and townhouses including foreigners. There is also no price threshold on the measure now either.

Announcing it, Victorian premier Jacinta Allan said it would be a $28,000 saving for anyone who bought a $620,000 apartment or townhouse off the plan. The measure was previously only for first time buyers and owner occupiers who had caps of $750,000 and $550,000 respectively in the past.

Land tax:

Social and emergency housing has been made exempt from land tax from 2025.

Vic Homebuyer Fund

Victoria has allocated $700m towards the Victoria Homebuyer Fund which will be replaced by a federal government scheme in future.

New South Wales focused on higher charges for foreign buyers in its policies this year.

NEW SOUTH WALES

First homebuyer grant:

Continuing policy (no change): A new home purchase can be offset by a $10,000 grant from the state government for first home buyers.

New housing policy:

Revenue Legislation Amendment Act 2024 – Surcharge Purchaser duty changes

Date: Jan 1, 2025

Dr Mardiasmo said the Amending Act amends the Duties Act 1997 (NSW) by increasing the surcharge purchaser duty rate from 8pc to 9pc and providing intermediate provisions regarding the increase.

This means that foreign persons who enter into a contract for the sale or transfer of residential property in NSW on or after January 1, 2025, will be liable for surcharge purchaser duty calculated at a rate of 9pc.

The 8pc rate of surcharge purchaser duty under Schedule 1 of the Amending Act will continue to apply to the following:

• the transfer of residential property under a contract for sale or transfer of the residential property entered into prior to the commencement of the amendment; and

• a surcharge duty transaction that arises from the exercise of an option for the sale or purchase of residential-related property if the option was granted before June 18, 2024.”

Foreign surcharge purchaser duty:

From January 1, 2025, the foreign surcharge purchaser duty will go to 9 per cent, up one point, for all purchases of residential property which is set to put the offshore buyer premium to get a foothold in New South Wales at 16 per cent.

Foreign land tax surcharge:

This charge will also rise from January 1, 2025 to 5 per cent (4pc in 2024) which will be on top of general land tax.

Freezing of land tax thresholds:

The threshold from which land tax activates has been frozen at $1,075,000 and $6,571,000 for premium land tax to bring more taxpayers into the net for the first time and could be in place for over two more years. The next review of that threshold is set for June 1, 2027.

Adelaide has seen major price increases as buyers across the country sought out more affordable markets. Picture: Brenton Edwards

SOUTH AUSTRALIA

A $50,000 head start is how the South Australian government is terming their assistance for first home buyers put in place for the year to June 30, 2025 – based on buying a $750,000 home – one of the best incentive packages in the country.

First homeowner grant:

Date: June 6, 2024

• Removal $650,000 property cap (Amendment)

• New Home that has not been previously occupied or sold as a place of residence.

• One applicant is Australian citizen (both over 18).

• Occupants have not previously received grant in any state or territory.

• Provides purchasers with $15,000.

A new home purchase can be offset by a $15,000 grant from the South Australian government for first home buyers and for the first time the South Australian government has removed the threshold on prices for the handout, so it doesn’t matter how much the homes cost as long as it is a new house, unit, townhouse, duplex or vacant land.

Stamp duty:

Date: June 6, 2024.

• First homebuyer stamp duty relief (Amendment)

• Must not have previously received stamp duty exemption in any state or territory

• Must be principal place of residence within 12 months of settlement date”

There will now be no stamp duty for South Australian first home buyers buying or building a new home regardless of the cost, with the 2024-25 State Budget abolishing property value caps for stamp duty relief on or after June 6, 2024. The previous cap was $650,000 but the state treasurer was reported as saying at the time that given the median house price passed $745,000, the move would give new buyers more certainty.

Perth has the hottest housing market in the country.

WESTERN AUSTRALIA

First homeowner grant:

Date: May 9, 2024 (Amendment)

• Increased threshold for the First Home Owner Grant

• First Home buyers will pay concessional rate on purchases over $450,000 to $600,000

• Previously ceased at $530,000.

Continuing policy (no change): The grant is set at $10,000 for a new home up to $750,000 bought or built in Perth metropolitan areas.

Stamp duty:

From July 1, 2024, the threshold for first homeowner transfer duty exemption was increased to $450,000 (up $20,000) and concession thresholds up $70,000 to $600,000.

Housing policy: New Vacant Property Rental Incentive Scheme

Date: May 7, 2024

• Owners of vacant properties will be offered a $5,000 payment if they make their property available as a long-term rental.

• The $5m Vacant Property Rental Incentive Scheme will offer payments to owners of vacant properties who are willing to provide a minimum 12-month lease agreement to new long-term tenants.

To qualify for the $5,000 payment, the vacant property must meet a number of conditions, including that it:

• has been vacant for at least six months from 8 November 2023 to 7 May 2024;

• is a single self-contained property with its own bathroom, kitchen and toilet (spare rooms or ancillary buildings, like granny flats, will not be eligible); and

• has not been used to receive a payment under the STRA Incentive Scheme.

The property must be tenanted for the full period of the minimum 12-month lease. If the lease is broken during that time, the property must be re-let on the long-term market within six weeks for the owner to avoid having to repay the grant money.

Housing policy: Social housing and homelessness

Date: May 9, 2024

• The Government has invested an additional $400m to expand the Social and Affordable Housing Investment Fund to deliver another 1,000 social homes.

• $92.2m has been allocated to support more than 120 homelessness services across WA.

The Tasmanian first homebuyer grant is $10,000.

TASMANIA:

First Homeowner Grant

Date: 01/07/2024

• The first homeowner grant is available to eligible applicants as one-off payment.

• Purchase or construction of a newly built home.

• Currently $10,000 (changed as of July 2024).

NT has a unique first homebuyer system in place which applies to major renovations and mobile homes too. Picture: Tourism NT

NORTHERN TERRITORY

First home buyers grant: Homegrown Territory

Date: October 1, 2024 – September 20, 2025.

• $50,000 for first-home buyers toward building or buying their first home.

• Can also be used for transportable homes.

• Available for both owner-builder and off the plan.

• No cap on build or purchase price.

• First home buyers only.

As much as $50,000 can be accessed via the Homegrown Territory Grant for those buying or building a new home, with no restrictions on income eligibility or property values with the additional perk that it can be a home moved from one site to another or a major renovation.

Government loan:

Via HomeBuild, households earning less than $127,500 can purchase property with a 2.5 per cent deposit, with the territory government providing a loan for as much as 17.5 per cent of the price for up to 30 years.