Housing affordability has steadily decreased over the past four years, and the new LNP Queensland Government has big plans to improve this woeful situation. So what are they planning to do?
The LNP plan for first home buyers:
- Abolish the stamp duty for every first home buyer buying or constructing a new home.
- Raise the stamp duty concession threshold in full for existing homes, up to $700,000 and partially up to $800,000, for first home buyers
- Build one million extra houses by 2044, make new regional plans and fast-track approvals
- Easing the burden of a large house deposit by providing a ‘Shared Equity’ program. Allowing first home buyers as little as a 2% deposit by funding 30% equity in new homes and 25% in existing homes, up to $750,000.
Home concession on transfer duty changes:
- To claim the concession on transfer duty or a FHO grant, you are now allowed to lease or rent part of the property, providing the lease arrangement starts between 10 September 2024 and 30 June 2025 and you continue to live in the property. (See this page for details).
LNP has set a large target of one million homes – scaling up the number of houses approved by 25% in the next five years and adding more social housing. However, the question remains whether developers can get the funding and land required to build them all.
Delivering more housing supply in general is designed to ease the cost of living, particularly for renters. The Crisafulli Government’s plan is to fast-track approvals and streamline the building of new homes by working directly with Councils.
What is a concession?
For transfer duty, a concession is a lower rate of duty than what would normally apply if you were buying non-residential land or an investment property. There are concessions on existing homes too, it’s just that a home concession rate applies to the first $350,000 of the value only and you must pay duty on the other part. Only individuals who are planning on living in the home for the first year may be eligible.
In some cases, you may not have to pay any duty because the benefit of the concession is equal to or greater than the duty you would otherwise pay.
Will the First Home Buyers Grant Continue?
The most generous in the country, the Queensland First Home Owners Grant is due to expire in June 2025. There is no telling what will replace it or whether a scaled down version will be kept. Currently, Queensland Govt. offers a $30,000 grant to first home buyers who are building or buying a new home with a value less than $750,000.
For James Brown, Principal of Current, the raising of the first home stamp duty concession threshold up to $700K (free of duty) and partially to $800K was a welcome move and it’s good that this will continue. There are many more homes in Morayfield and Caboolture selling for around $700,000 which suit new home buyer families looking to settle here.
The increase in land prices and construction prices has moved some opportunities for larger lots greater than 450m2 above the $750,000 threshold, thus limiting the options available for first home buyers to obtain the grant whilst building a new home.
Lower Deposits: National ‘Help to Buy’ Scheme
There is also another Federal Government deposit initiative coming soon, whereby those who don’t have enough deposit for a home loan (and are eligible) may be able to access a different shared equity scheme, with up to 40% for new houses and 30% equity share for existing houses. This Help to Buy scheme bill has just been passed to the Senate for approval.
Britons have had a similar scheme in place for several decades but the policy has been disliked by some owners, who are liable for 100 per cent of building defects and repairs despite only owning a portion of the home. The Help to Buy scheme for Queenslanders will come in by late 2024 if the Commonwealth Bill passes.
Initiatives to Encourage Developers
With fast-tracked assessment, there is already home building development in Caboolture West (Waraba) PDA, where 13,000 new homes will be built over the next 15 years. The infrastructure spend for Waraba was enabled by a $210 million Growth Areas Compact commitment in 2022 as part of a SEQ city deal.
There is also the North Brisbane Bruce Hwy Western Alternative, which is four stages and is an ongoing project. The highway will run up from Narangba through Moorina (Stage 2), through Waraba, and then Moodlu to Elimbah (Stage 4).
Meanwhile, the Sunshine Coast Regional Council have not put in place their 2024 – 2045 town plan, holding up the plans of many who are awaiting surety of zoning and DA laws before locking down their developments. They state: “Preparing a new planning scheme is a multi-year project with many stages.” (Long story short, it takes around four years).
Sources: Help to Buy Scheme