Raine & Horne supports financial incentives for first time buyers in WA

Media release

Perth, Australia (24 April 2018) A Western Australian property thought leader has thrown his weight behind a call to reinstate the first home owners grant (FHOG) for established homes.

Western Australia’s peak real estate industry body, REIWA is urging the state government to reintroduce the $3,000 FHOG grant for the purchase of existing dwellings in next month’s budget, as well as the retention of the existing transfer duty exemption for first home buyers at $430,000.

“We’re seeing some green shoots of real estate activity because of stronger economic news, combined with a significant investment in transport infrastructure, jobs growth in the mining sector and ongoing historical low-interest rates,” said Craig Abbott, General Manager WA, Raine & Horne.

“Moreover, property values have hit the bottom of the cycle in Perth, yet first home buyers still need some extra financial support to encourage them to jump off the rental treadmill and into a first home.

“Currently the first home owners grant is only available to those buying house and land packages, but as research regularly tells us, many first-time buyers prefer established properties.”

Access super for a first home from 1 July 2018

Apart from REIWA’s call for the reinstatement of the FHOG in Western Australia, those first timers who have made voluntary contributions into super using the Federal Government’s First Home Owner Super Saver Scheme (FHSSS) will be able to access these contributions from 1 July 2018.

Since 1 July 2017, first-time property buyers have been able to make voluntary contributions of up to $15,000 per year and $30,000 in total, to their superannuation account to purchase a first home.

These contributions, are taxed at 15%, along with deemed earnings, can be withdrawn for a deposit for a home, noted Mr Abbott. Withdrawals will be taxed at marginal tax rates less a 30% offset and allowed from the start of the 2018/19 tax year.

“To qualify for the FHSSS you must be a genuine first home buyer, who has not previously accessed funds from superannuation,” Mr Abbot explained.

To be meet the criteria for the FHSS, homeowners must either live in or intend to live in the premises as soon as possible or intend to live in the property for at least six months of the first 12 months you own it, noted Paul Curran, Principal of Raine & Horne Rockingham Beach.

Superannuation must be protected

“I’m all for encouraging younger Australians to tap into their super to buy a first home. However, I believe that the FHSSS should be used for homeownership only,” he said.

“Superannuation is a tax platform that has been created to help fund our retirements.

“Therefore, if a homeowner moves out of the home and puts the property into the rental market and becomes a so-called rentvestor after six months, then he or she should return the FHSSS contributions back into superannuation.

“It’s not for me to put a time limit on this, but likewise once the homeowner upgrades to a more substantial property and a capital gain is triggered, some of the profits from this sale, assuming there are any, could be used to repay the money into superannuation.

“People can’t reach the end of their working careers and find they are unable to fund a comfortable retirement.”

In the Rockingham LGA, first-time home buyers can secure entry-level houses from $220,000 in suburbs such as Baldivis, Waikiki, and Port Kennedy according to Mr Curran.

Raine & Horne Rockingham Beach is selling a beautifully presented three-bedroom house at 65 Discovery Crescent, Port Kennedy from $240,000. The property is conveniently located close to schools, shops, and landscaped parks.

Mr Curran notes, “This home is built on a family size 684 square metre block with native gardens and a great outdoor colour bond patio area, perfect for all year round entertaining.

“All the hard work is done, with a new kitchen with stainless steel appliances recently installed, new floor coverings and window treatments and it’s been freshly painted.

“It’s the perfect property opportunity for first home buyers, with nothing to do but position your furniture in the right rooms.”

–ENDS–

For further media information contact:

Craig Abbott, General Manager WA, Raine & Horne Group on 0498 007 441

Paul Curran, Principal of Raine & Horne Rockingham Beach on 0418 946 993