Extra $3000 for NSW first home buyers

The NSW government's extra $3,000 for first-time home buyers is unlikely to stimulate the ailing housing market without changes to crippling levies, critics say. The economic sweetener, to be announced in Tuesday's mini-budget, takes the NSW First Home Owners Grant to $10,000 and can be added to recent generous increases
offered by the federal government - $14,000 for established homes and $21,000 for newly built houses.

Premier Nathan Rees said the boost in grants, combined with the fall in interest
rates, would make buying a home more affordable and be a shot in the arm to the
construction industry.
The extra $3,000 would be available to about 3,000 first home owners for one year
before being re-assessed.
"This grant is a further $9 million investment in the NSW housing sector and will be
fully-funded by the NSW government in the upcoming mini-Budget," he said.
Mr Rees also said that from July 1 next year the First Home Owners Grant scheme
would be capped for properties valued up to $750,000 - similar to that announced by
Queensland.
Urban Taskforce chief executive Aaron Gadiel said stamp duty and levies imposed on
new homes made it financially unviable for developers to build.
"The state government routinely charges a $40,000 levy on any home at all built in
areas for urban expansion.
"These levies are being paid by the developer.
"The developer won't build the homes unless he can be satisfied the homebuyer can
pay the levies."
Mr Gadiel said in September this year, seasonally adjusted home approvals in NSW
fell by 26 per cent compared with the previous month, while Victoria saw only a four
per cent fall.
"In NSW anti-development sentiment and higher development costs have meant a more
rapid fall-off in investment than in other states."
He said a lack of new housing supply was contributing to skyrocketing rental prices.
First home buyers struggled to save a deposit for their own home.
In Baulkham Hills, north-west Sydney, Mr Gadiel said rent had increased by 20 per
cent in the last financial year.
"That's because it has not been possible for much land to be developed," he said.
Opposition leader Barry O'Farrell said the Rees government "had to get serious about
reducing taxes and levies" to kick-start the NSW property market.
"We need lasting solutions for the sector," he said.
First home owners will be able to apply for the extra grant from November 11.
The grant will operate for one year, after which the government will re-assess it.