NEW DEAL: First-home buyers purchasing newly-constucted properties will be entitled to a $15,000 grant.

FIRST-home buyers purchasing established properties will be stripped of the long-running $7000 grant.

The Courier-Mail can reveal the Newman Government will replace the grant with a $15,000 handout to first-time buyers purchasing newly-constructed properties.

The controversial decision, to be unveiled in Tuesday’s Budget, will outrage the real estate sector but be lauded by the struggling construction industry.

First-time buyers will be given until October 11 to sign contracts before the permanent demise of the $7000 grant, which was originally introduced by former prime minister John Howard to offset the cost of the GST.

The $15,000 grant will be available from September 12 for properties valued at up to $750,000.

Treasurer Tim Nicholls said the grant was a better-targeted response to previous attempts to stimulate the construction sector.

“The grant does not have an expiry date, which means it will give confidence to the construction and property sectors over the long term,” he said. “The First Home Owner Construction Grant is yet another component of our positive plan for this vital sector of the economy, which creates jobs for Queenslanders.”

The decision to eliminate the $7000 grant, which cost taxpayers about $117 million a year, is also likely to hand the Government significant savings.

The former Bligh government attempted a similar construction sector stimulus with $10,000 for all buyers, but it did little to attract buyers in the depressed market.

However, the industry argues the so-called building boost had little chance of success while the $7000 grant for existing homes continued.

“All (the $7000 grant) served to do was increase the value of established property by about that same measure,” UDIA president Matthew Wallace said.

The move comes as the first-home sector of the market has shown signs of improvement. Office of State Revenue figures show 5413 grants were handed out in the June quarter, compared with 4005 in the corresponding quarter in 2011.

Source – Courier mail  – http://www.news.com.au/national/first-home-buyers-told-to-build-or-miss-out-on-first-home-buyers-grant/story-fndo4ckr-1226470661174