SheldonThinks Forum

sheilamyers · Newbie

FHOG, first home owner grant 14k in Australia

littlewalrus · Veteran Member

sheilamyers wrote:
I've been reading online about what they say and it's interesting the they come up with all sorts of assumptions:

1. 14k first home owner grant will just in case the property prices even more. last time it was given, the value of properties increased up to 32%
2. 14k is given away but you are taxed for it!
3. it's just better to rent, enjoy life than enslave yourself all your life trying to buy a house in sydney
4. Doesn't really help people and if the au govt really wants to help the homeless... it should increase the grant
5. the grant is only offered to people who have salaries less than 80k aud a year...

I disagree with this. The first home owners grant would no doubt have helped to stimulate property prices in previous years, but that was just one factor. There was also monetary stimulus (lower interest rates), strong income growth and immigration. The interest rate cuts are back, but they are not going to be much stimulus whilst property prices are falling and debt levels so high.
Well the grant is only subject to tax at the marginal tax rate. Well if the government wants to help the economy, maybe it should just give the poor $14K cash to spend. Its not going to spend consumption, it will stimulate the purchase of housing stock in outer areas where no property boom. So the mushroom cloud extends out further.
Certainly its stupid politics if governments are giving us money to have babies, buy houses. Its the ultimate fascist policy, worse than price controls because its trying to direct resource allocation. Hitler would have been proud.

selenawright · Member

Federal state of NSW just added 3k on top of the 14k that the Au govt is giving away. Looks like there's tremor over Australia's real estate market. I am thinking Au will be the next in recession. Germany already declared that being under the state of recession. Just recently.