You Can Afford Your Own Home!

While the problem of housing affordability has been a hot topic in recent times, I’d like to share with you one solution that I’ve been helping home buyers with since 2010.

Working as a mortgage broker and real estate agent during the past 27 years, I’ve met many people who believed they couldn’t afford to buy a home. But when we sat down together and examined their spending habits, we often discovered they could easily afford their own home… if they were prepared to make a few simple changes to their discretionary spending.

You see, humans aren’t always rational creatures. Sometimes highly intelligent people make dumb financial decisions that could prevent them from ever owning a home.

Let’s take smoking for example. According to Quit Victoria, someone smoking a pack of 20 cigarettes a day is wasting around $154 a week or $8,000 a year. For a couple with similar smoking habits, that’s a massive $308 a week or $16,000 a year.

And, it’s about to get significantly more expensive. On 1st September 2017, the Federal Government will start ratcheting up tobacco excise rates and by September 2020 this couple will be blowing around $560 a week on cancer sticks.

After 25 years they will have burned around $730,000 and all they’ll have to show for it is lung cancer or emphysema!

They’ll probably also waste a similar sum of money on rent (which their landlord will wisely use to pay off his/her own mortgage). 

How crazy is that? Almost $1.5 MILLION spent, yet they won’t even own a brick, a floor tile or a kitchen sink!!

That same amount of money could pay two $400,000 mortgages off over 25 years (assuming an interest rate of 5.5% p.a).

They could own their home and an investment property outright, with a combined value of $3 million (assuming both homes were bought for $450,000 each and they achieved a modest capital growth rate of just 5% p.a).

Of course, not everyone smokes. But many people could still save hundreds of dollars a month by reducing the frequency of dining out and takeaways, fancy coffees, gambling, alcohol consumption, lavish holidays and buying used cars instead of new.

Now what if you combined some of these money saving suggestions with a brilliant home ownership strategy?

Would you be excited to learn how you could live in a brand new home and have someone else paying up to 60% of the mortgage payments for you? 

To find out how, read Housing Affordability Solution.

© Brian White – This article courtesy of The article may be reproduced provided the above courtesy notice and author name remain intact.

Experience Counts!

When my car needs servicing, I take it to an authorised dealership because they have the skilled mechanics, high-tech equipment and genuine parts that are necessary to do the job properly. I’m smart enough to know that I couldn’t do the service as well myself.

For similar reasons, I don’t attempt to cut my own hair, do my own dental work or pretend that I’m an electrician, a solicitor or an accountant.

So, it always amuses me when I hear about amateur property investors who take investment advice from other novices like family and friends, or even complete strangers on Facebook or internet blog sites.

It may also surprise you to learn that many real estate agents do not own any investment properties and they have little experience with Cashflow Positive or Instant Equity strategies. That old saying about “the blind leading the blind” comes to mind!

I’ve been involved in the property industry for 27 years, as a mortgage broker, real estate agent and investor. During this time I’ve helped hundreds of investors build their portfolios, with some accumulating more than a dozen properties.

My simple, low-risk investment strategies assist average wage earners to build a solid asset base and strong passive income stream to provide a financially secure retirement.

This is achieved with three unique types of residential property:

  1. Dual Occupancy Homes – these generate strong Cashflow Positive returns.
  2. Co-Living Homes – these generate even better Cashflow Positive returns.
  3. Duplexes – these are usually Cashflow Positive and offer the potential to make up to $130,000 Instant Equity.

Gross rental yields average 6% – 7% p.a. on Dual-Occs and 7% – 8% p.a. on Co-Living homes!! (Traditional properties return a gross yield of around 3% – 5% p.a).

Consider the superior benefits these homes provide compared to ordinary houses, units or townhouses:

  • Higher rental yields
  • Lower vacancy rates
  • Greater tax benefits
  • Instant equity potential (Duplexes)
  • NO body corporate/strata fees

Plus, in SE Queensland these types of properties cost at least $100,000 less than in Melbourne or Sydney!

If you’re ready to Boost Your Income, Pay Less Tax and Build Wealth for Your Retirementplease contact me and I’ll be happy to provide more information and answer any questions you may have (obligation free). Brian White 0418 360 490 or

P.S.  While some property ‘gurus’ charge thousands of dollars for mentoring programs or to find an investment property for you, my services are absolutely FREE!!

P.P.S.  You can learn more about these powerful wealth creation strategies by reading my investment articles:

Dual Occupancy Homes

Co-Living Homes      

Instant Equity 

Q & A                                                                                           

Retire Richer!                                                                 

Cashflow Positive Property                  

Prepare Yourself for Investment            

NOTE: Returns will vary depending on your personal circumstances. Always seek independent financial, legal and taxation advice before making any investment decision.

© Brian White – This article courtesy of The article may be reproduced provided the above courtesy notice and author name remain intact.

EXPOSED: How Banks Manipulate Property Values

I’ve been involved in the property industry for 24 years (as a mortgage broker, real estate agent and investor). In recent times, flawed valuations have become a significant source of complaint from buyers, sellers and agents. Why? Because valuers are routinely undervaluing property, resulting in contracts being terminated. 

What most people don’t know is that the cause of this problem is often the type of valuations that lenders demand.

Read on to discover the secret tactics used by many lenders to manipulate property values, boost profits and protect their backsides… all at your expense.

As you are probably aware, if you buy a property which requires financing, the lender will usually insist on having a valuation done. This is a sensible precaution to take when hundreds of thousands of dollars may be at stake. The lender needs to feel confident that should you default on the loan, a forced sale will yield sufficient funds to pay out the loan balance, plus accrued interest, agent’s commission, lender’s legal fees and advertising costs.

While no one objects to lenders fairly protecting their interests, some of the methods used to value residential property are intentionally secretive and deceptive.

Most people innocently assume that when a valuation is conducted for mortgage security purposes, it is done on the basis of Market Value.

So what exactly does Market Value mean? The Australian Property Institute defines it as “The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.” 

Unfortunately, many lenders instruct valuers to prepare Bank or Forced Sale Valuations (think ‘mortgagee in possession’), rather than genuine Market Valuations.

Bank Valuations are often 5% – 10% lower than Market Valuations. This means that average homes in Brisbane, Melbourne and Sydney could easily be undervalued by $25,000 – $100,000! 

Banks rarely explain this to borrowers and usually refuse to provide them with a copy of the valuer’s report. In lying by omission, banks are denying borrowers the right of informed consent.

Such unscrupulous behaviour contravenes the Australian Banking Association’s Code of Banking Practice which promises customers “effective disclosure of information” and to “act fairly and reasonably towards you in a consistent and ethical manner.”

This practice of deliberately undervaluing property affords lenders and Mortgage Insurers these major benefits:

  1. It provides them with the maximum safety margin in the event that borrowers default on their loans and properties need to be forcibly sold at auction.
  2. It coerces people into borrowing more money than they intended because they need to pay inflated Lenders Mortgage Insurance premiums. This results in higher interest payments that boost lenders’ profits by millions of dollars every year.
  3. Mortgage Insurers also make bigger profits by charging higher premiums.

Here’s an example of how the scam works. If a bank was lending you 90% of Market Value to buy a $600,000 home, you would borrow $540,000 and provide a $60,000 deposit. But, if the property is valued at just $570,000 on a Bank Valuation, your 90% loan is reduced to $513,000 and you suddenly need to find a deposit of $87,000.

If you don’t have the extra $27,000 the bank may agree to lend it to you, however because your ‘loan to valuation ratio’ has jumped to 94.7% you would be hit with additional Lenders Mortgage Insurance (LMI) of $10,800. With the LMI added to the loan, you are now borrowing $550,800 instead of the original $540,000.

On a principle & interest loan at 6% p.a. your repayments will increase by $70 per month and you will pay an extra $10,076 in interest over the next 25 years.

In total, you will repay $20,876 in additional borrowings and interest charges ($10,800 + $10,076) which would have been completely unnecessary if the home was valued honestly in the first place.

And it gets even worse. Because lenders want to pay valuers the lowest fees possible, they will often instruct them to conduct Desktop Assessments. As the name suggests, this is where the valuer prepares a written report from the comfort of his or her office, without ever seeing the property in question!  

A slightly better version is known as a Restricted Assessment (kerbside inspection).  In this case the valuer is prohibited from entering the property and simply stands on the footpath, estimates its age and condition and takes a photo.

Unless valuers possess x-ray vision or some other kind of supernatural powers, these are absurd methods of valuing someone’s most important asset.

I once inspected a house that appeared to be quite nice from the outside, however upon entering I discovered that feral tenants had kicked holes in every wall panel, ripped doors off cupboards and poured paint on timber floors and carpets. This obviously had a serious impact on the property’s value, but without a physical inspection this would have been impossible for a valuer or lender to know.

For peace-of-mind you should always insist on having a Market Valuation done on any property you are buying or re-financing. 

In my experience most valuers are very professional, but I have met a few who were totally incompetent. Here’s a couple of horror stories from my office files…

Recently, CBA requested a Desktop Assessment on a new apartment at Maroochydore on the Sunshine Coast. Because the valuer was lazy, he didn’t bother contacting the selling agent (me) or the developer to confirm details about the property. A few days later the distressed buyer called me to say his $495,000 unit had been valued at just $400,000. That’s a whopping $95,000 shortfall!

After speaking with his lending manager I quickly realised that the valuer had assessed the wrong unit within the complex. Although the internal floor plan was correct, he had valued one with an 8balcony instead of the actual unit which had a massive 97courtyard. Naturally, we demanded a new valuation to be conducted by another firm. Unfortunately, CBA’s bureaucratic rules only permitted the same valuer to re-assess the property. He begrudgingly increased his figure by a paltry $25,000.

I then referred my buyer to an independent mortgage broker who arranged for another valuation to be done at Market Value. Not surprisingly, and to the great relief of my buyer, this came in at full contract price.

On another occasion I sold a new 2 bedroom luxury apartment in the Brisbane suburb of Bulimba for $669,000. Astonishingly, Bankwest’s valuer said it was only worth $580,000. On my insistence, the buyer complained to her bank and we were able to obtain a copy of the valuer’s report. What a shocker! One of the properties listed as ‘comparable’ was a 30 year old renovated townhouse located 5km away in the suburb of Morningside, where the median house price was $100,000 lower.

To call these properties comparable is like saying that a surfboard and a jet ski are similar. When I brought this obvious flaw to the attention of the bank they engaged a valuer from another firm. The new figure was for the full purchase price. That’s a huge  $89,000 difference between valuers!

So how could they get things so wrong?

Contrary to what some people may believe, valuing real estate is not an exact science and outcomes are subject to the personal views and experience of individual valuers.

If you want to test this, phone three different valuation firms and ask them to value your own home. The result will most likely be a variance of up to 15% between the highest and lowest figures. This could easily equate to tens of thousands of dollars.

The next time you need to borrow for a purchase or re-finance you should have a frank discussion with your lender and find out what type of valuation they intend to request. If you don’t get the right answers you should consider using a mortgage broker. (Contact me if you’d like a referral).

And a few more tips…

If a seller is offering incentives such as a cash rebate at settlement, or paying your transfer (stamp) duty, valuers will usually deduct these amounts from the contract price.

Also, if a developer is supplying a free furniture package valuers will often discount the purchase price by the equivalent value of the furnishings. This is because banks cannot take security over removable items (chattels).

So, it is always advisable to have surplus cash available (or access to equity in another property) to meet any potential shortfall caused by a low valuation.

P.S.  As outlined in this article, lenders rarely advise borrowers they are using forced sale values, but buried deep within NAB’s website I found the following admissions  

“Sometimes, the figure we use will be less than the market value of your home and we don’t always tell you how much it is.”

“A bank valuation is not the same as the market value.”

“A bank valuation will nearly always be less than the market value. This is because they’re not the same thing.”

“if you have difficulties with the loan and you’re no longer able to make the repayments, we may have to sell the property to pay back the loan. If this happens, we’ll sell the home quickly to avoid the interest accumulating over a long period. Unfortunately, we may sell the home at a lower price than you’d get if you sold the home without this time limitation. This is the figure we assess for when we get a bank valuation.”

UPDATE: After I exposed NAB’s sneaky valuation tactics the bank heavily edited its website article to remove most of the above statements. Fortunately, I saved a screenshot of the original document. Contact me if you’d like a copy.

© Brian White – This article courtesy of The article may be reproduced provided the above courtesy notice and author name remain intact.

Dual Occupancy Homes

As property prices continue to rise, Dual Occupancy homes are becoming increasingly popular with owner-occupiers and investors due to their affordability and the flexibility they offer. 

These can take on many forms, such as duplexes, duplex-style houses, dual-key units and houses with a detached granny flat in the back yard. Regardless of the actual design, they all provide the ability for two families to share the same property, yet live completely independently of each other.  

For example, the floor plan below shows a 5 bedroom house with a fire and sound rated wall dividing the home in two. This is similar to a duplex – one side has 3 beds, 2 baths and a single garage and the other has 2 beds, 1 bath and a single garage.

Each side has its own entry and a separate kitchen, dining/living area and laundry. They also enjoy private alfresco areas and fenced back yards. There are two power meters, water meters, hot water systems, clothes lines and TV antennas.

This type of property has a SINGLE FREEHOLD TITLE, so there are NO Body Corporate Fees and only ONE Council Rates to pay.
Dual Occ Floor Plan

Gibson Urban Ipswich

From the street Dual-Occs look just like traditional family homes. However, clever internal designs allow two families to share the same property, yet live completely independently of each other.

Dual Occupancy homes provide owners with enormous flexibility to meet their changing lifestyle needs. Here’s a few ideas:

  • Owner-Occupiers – live in one side and rent the other… your tenant helps pay the mortgage for you!
  • Teenage Retreat or Granny Flat – if the kids can’t afford to move out on their own, or if grandma needs looking after, this could be the perfect solution.
  • Investors – rent both sides out to maximise your yields. These properties will usually be Cashflow Positive and return $80 – $150 per week after all costs including mortgage payments, rates, management fees and insurance.

WARNING: Dual Occupancy homes can be valuable assets, however you need to be very careful about where you buy them. While most councils allow these types of properties to be built, some will only permit them to be occupied by family members. This means you can be fined if you breach this rule. Even worse, if your non-related tenant slipped in the shower and cracked his head open on the tiles, your insurance company will not cover you if the property was being used for an illegal purpose. Your tenant could then sue you personally and all of your assets could be at risk.

To avoid these pitfalls, we work closely with award-winning builders who specialise in building council approved Dual Occupancy homes in Ipswich/Springfield, Toowoomba, Moreton Bay, Logan City, Gold Coast and the Sunshine Coast.

Due to the rarity of these properties, they usually sell extremely quickly. Recently, four of these became available in a new housing estate and they all sold in just 24 hours! For this reason, priority will be given to buyers who already have their finance approved (let us know if you would like assistance with this).

The purchase involves two contracts:

  1. Land Contract – $1,000 initial deposit, with settlement in 30-45 days.
  2. HIA Building Contract – 5% deposit, plus 5 progress payments during construction (approximately 4-5 months to complete).

You only pay stamp duty on the land… a saving of at least $10,000!

Depending on the location, land size and number of bedrooms and bathrooms, prices typically range from $450,000 to $575,000.

Investors with bigger budgets could even consider a triplex or a quadplex… imagine the huge rental returns you could generate from three or four groups of tenants! You’d also have very low overheads (no body corporate fees and only one council rates).

Intrigued by the possibilities? Please contact us anytime if you’d like to find out more about these truly unique properties.

NOTE: Returns will vary depending on your personal circumstances. Always seek independent financial, legal and taxation advice before making any investment decision.

© Brian White – This article courtesy of The article may be reproduced provided the above courtesy notice and author name remain intact.

Investors – receive $228,844 in TAX FREE Government incentives!

Sound too good to be true? Read on to learn more about this amazing offer…

In 2008, a joint initiative between the Australian, State and Territory Governments established the National Rental Affordability Scheme (NRAS). The scheme offers valuable incentives to investors who provide affordable rental accommodation to moderate income earners such as teachers, nurses, police, fire-fighters and retail-sector workers.

NRAS is NOT a public housing program or social welfare scheme and merely seeks to address the shortage of affordable rental housing available to hard-working ‘middle Australia.’ Eligible single tenants may earn up to $44,835 p.a; couples up to $61,985 p.a; and a couple with 3 children up to $106,598 p.a. Tenant income limits are revised and increased on 1st May each year.

In return for investors agreeing to rent their properties at least 20% below market rates, they receive very generous cash and tax incentives. The NRAS incentives for 2012/2013 comprise:

1. Australian Government contribution of $7,486 per dwelling (as a refundable tax offset or payment); AND

2. State or Territory Government contribution of $2,495 per dwelling (in direct or in-kind financial support). In Queensland this is paid as a cash payment.

This equates to TAX FREE income of $9,981 per dwelling and the incentive amounts increase on 1st May each year in line with the rental component of the consumer price index. Over the past four years, increases have averaged 5.7% p.a. Assuming CPI increases of just 3% p.a, investors would receive the equivalent of $114,422 per dwelling over the 10 year period of the scheme.

However, it gets even better… if you buy the right type of approved property (e.g. dual-key units), you can double these incentives to more than $20,000 every year for the next decade. THAT’S A MASSIVE $228,844… AND IT’S ALL TAX FREE!!

This effectively means that for each dollar that you discount the rent, you receive at least two dollars of non-taxable income from the government!

This is in addition to all the usual financial benefits available to property investors, such as tax deductions on interest payments and depreciation on furnishings, fixtures & fittings and the construction cost of the property. Depreciation on a typical 2 bedroom apartment could average over $7,000 every year for 40 years.

Under NRAS, many investors find their property is cashflow positive… in other words, not only does it cost them nothing to own it, they actually make a profit of up to $13,000 or more each year! This makes it viable for some investors to buy several properties… a feat which would be difficult or impossible using traditional ‘negative gearing’ strategies.

While ‘negative gearing’ can offer good tax benefits, having negative cashflow means that investors have to pay interest and expense shortfalls out of their own pocket. It also limits their ability to borrow more money to buy additional properties. These are major reasons why few investors are able to build a substantial property portfolio. (According to the ATO, 73% of investors own just one property).

In stark contrast, if each of your properties is producing strong positive cashflow, it may be possible to accumulate 3 – 5 properties during your working life to fund a very comfortable retirement.

Properties can be purchased in your own name, or via a company or self-managed superannuation fund.

Banks will generally lend 80-87% of the value of NRAS properties.

NRAS approved dwellings are very rare… less than 1% of new investment properties qualify for NRAS incentives and with most of these properties already allocated, opportunities for investors are quickly diminishing.

To learn more about NRAS, click on this link to the Australian Government’s website:

NOTE: Returns will vary depending on your personal circumstances. Always seek independent financial, legal and taxation advice before making any investment decision.

© Brian White – This article courtesy of The article may be reproduced provided the above courtesy notice and author name remain intact.

Property or Shares?

Which is the best investment… property or shares?

It’s a question that has been argued for generations. Proponents from both sides of the fence will offer their opinions and try to influence investors on where to place their funds for the best returns.

Many are persuaded by stockbrokers and financial planners that shares are the best vehicle for wealth creation. Similarly, real estate agents will be equally convincing that property is the only way to go.

So what is the truth?

If you want a truly independent, unbiased answer, simply ask the moneylenders… the banks. They will happily lend you money to invest in shares or real estate. Contact ANZ, CBA, NAB or Westpac and ask them just two questions…

Q1  “What percentage of the value of a house or unit will you lend me for investment?” ANSWER – “We will lend you up to 90% of the property’s value (and up to 97% if buying as an owner-occupier).”

Q2  “If I buy shares in your bank, what percentage of their value will you lend me?” ANSWER – “We will lend you a maximum of 75%.”

So my friends, there’s your answer. If the four biggest banks in the country will only lend you 75% of the value of their own ‘blue-chip’ shares, they are telling you that residential real estate is a far safer, more stable, long-term investment.

The reason for this is simple. No one needs to own shares, but everyone needs a place to live. Bankers also know that sharemarkets are inherently volatile and are on a perpetual roller-coaster ride between ‘booms and busts.’

When the sharemarket inevitably crashes, advisers try to calm clients with platitudes like “The market always rebounds to a higher level than its previous peak.”

Somehow, I don’t think that sentiment would have been very comforting to the millions of investors who lost fortunes when these prolonged crashes occurred:

  • Between September 1929 and July 1932 the Dow Jones suffered an incredible 89% fall. It didn’t recover to its pre-crash peak until November 1954… 25 years later!
  • The All Ords crashed spectacularly in October 1987, wiping 27% off its value in just one day and 46% over three weeks. It was 6 years before it recovered to its previous high.
  • In March 2000, NASDAQ reached a peak of 5,132 before crashing. It didn’t regain that level again until June 2015… a full 15 years later!
  • The All Ords hit an all-time high of 6,873 on 1st November 2007 before it started a long slide downwards. It took almost 12 years to recover.

And I wonder how many retirees have died of old age waiting for the Nikkei to roar back to a record high? It’s been a whopping 31 years since it peaked at 38,957 in December 1989, and it’s never come close to replicating that feat again.

Interestingly, ASX listed property developers such as Devine, FKP, Lend Lease, Stockland, Mirvac, AVJennings, Australand, Villa World and Sunland all saw their share prices decimated between 2007 – 2009, with falls ranging from 58% to 96%, while the values of the houses and units they built fell less than 10%.

This graphically highlights the relative stability and security of owning real bricks & mortar verses shares.

Ultimately, the question of which is the ‘best’ investment will depend on a number of factors including your age, your income level, how much debt you have, and how risk averse you are. If you’re retired, capital guaranteed investments or regular monthly income from a rental property may offer you much lower levels of risk compared to the volatility of the sharemarket. However, if you’re in your 30’s or 40’s and have a secure  job, you may want to invest in a mix of property, shares and managed funds (either directly or via a self-managed super fund).

Always seek professional advice before making any investment decision and remember that ANZ, CBA, NAB and Westpac all consider residential property to be a safer investment than shares in their own banks!

© Brian White – This article courtesy of The article may be reproduced provided the above courtesy notice and author name remain intact.

Property Values – U.S. vs OZ

While many Australians bemoan the slide in property values in the wake of the Global Financial Crisis, our market has remained particularly resilient compared to that of our American friends. In many areas of the U.S. home prices have fallen by an average of 30% since late 2006. In some cities, the falls are even worse. Las Vegas home values have nosedived 60%, Phoenix 55%, Miami 50% and Detroit 40%. Even the best performing cities like New York have seen prices fall by 20%.

Much of this catastrophe can be traced back to the reckless lending practices of American banks. In the years leading up to the GFC, intense competition between lenders for revenue growth and market share resulted in them relaxing underwriting standards and giving mortgages to millions of high-risk borrowers. These are often referred to as sub-prime mortgages or “NINJA” loans… that is, loans to borrowers who have No Income, No Job or Assets. At the height of the housing boom, these loans accounted for roughly 40% of newly issued mortgages in the U.S. Fuelled by the insatiable greed of financial institutions, this easy-credit epidemic meant that if you could walk and chew gum at the same time, you’d probably qualify for a home loan!

Inevitably, as interest rates increased and unemployment grew, huge numbers of people began defaulting on their repayments, causing the housing bubble to burst. By September 2009, 14.4% of all U.S. mortgages were either delinquent or in foreclosure. This has improved slightly to 11.6% today.

So how do we compare here in OZ?

According to the latest research from RP Data, average falls in capital city home values bottomed at 7.4% earlier this year and have since recovered to be just 4.5% below their previous peak. Generally speaking, units have shown a greater resistance to price falls than houses. Currently, unit values are only 2% below their 2010 peak, with houses down by 4.9%.

Apart from having a more robust economy, our banking system didn’t follow the U.S. trend of widespread sub-prime (low-doc) lending. Since 2008, 417 U.S. banks have collapsed, while not one has met the same fate here. In fact, Australia’s ‘big four’ banks are all ranked in the top 21 safest banks worldwide. This is an incredible achievement when you consider there are thousands of banks globally and we only have 0.32% of the world’s population!

Although there is one thing that Yank banks offer that many Aussies would love to have… 30-year mortgages fixed at just 3.5% p.a!!


  • Unemployment rate – U.S. 7.8% vs OZ 5.4%
  • Delinquent & foreclosed mortgages – U.S. 11.6% vs OZ 0.6%
  • Decline in capital city home values – U.S. 20%+ vs OZ 4.5%

© Brian White – This article courtesy of The article may be reproduced provided the above courtesy notice and author name remain intact.

New ‘First Home Owner Grant’

First home owners must buy or build new homes or miss out on the grant. In an attempt to stimulate the sluggish residential building industry, the Qld Government has changed the eligibility rules for receiving the First Home Owner Grant (FHOG).

Previously, first home buyers received $7,000 when they purchased a new or pre-owned property up to the value of $750,000. From 12th September 2012, they receive the new $15,000 First Home Owner Construction Grant (FHOCG), provided they buy or build a new home (includes off-the-plan and substantially renovated properties).

Anyone wishing to buy a pre-owned property only has until 10th October to sign a purchase contract to qualify for the outgoing $7,000 grant… after this date they’ll get absolutely nothing.

In theory, the government’s plan to help the building industry sounds good, but the Real Estate Institute of Queensland says that 76% of first home buyers actually bought pre-owned homes because of their lower prices. The pricing discrepancy between new and second-hand homes is largely due to the fact that local and state governments impose massive taxes & charges on developers which equate to approximately 15% – 20% of a property’s value.

In other words, a new home which sells for $500,000 includes around $75,000 – $100,000 in government costs!! It’s no wonder kids are choosing to rent or stay at home with mum and dad until their thirties!

$15,000 Grant Eligibility Guidelines:

  • to assist with buying or building a new house, unit or townhouse
  • homes must be worth less than $750,000
  • available to Australian citizens and permanent residents
  • must not have previously owned a ‘principal place of residence’ in Australia
  • may rent the property out for up to 12 months before moving in
  • need to move into the home within 12 months of settlement
  • must live in the home for at least 6 months continuously

For more information on the new grant, follow this link to the Office of State Revenue website:

© Brian White – This article courtesy of The article may be reproduced provided the above courtesy notice and author name remain intact.