First Home Buyers Grants

If you live in Australia, you are all aware of the Federal Government’s First Home buyers grants and of course the State Government contribution to this with discounted stamp duties.

Now of the surface of this it looks great.. but if we delve further and although it can not have anything like the outcome scenario of the United States Sub-Prime disaster. There is potential for a serious down side to this practice.

These grants were put in place allegedly to help you home buyers get into their first home, actually it does this, but another reason is to help the building industry stay employed.

I wonder how many people look at the negative side of this scenario, I think it is great so long as both partners in the marriage or life partnership are employed, what happens if one or both partners are made redundant, in this economic climate, this may become the norm, other than the exception… or they have the news (great news) that they will soon have an addition to the family. Also lets not forget the obvious, an interest rate rise, once the economy starts to even warm up a little there will be all sorts of temptation by the Reserve Bank (the Federal Reserve in the USA) to increase interest rate (although anyone at the moment with these interest rates who didn’t lock a contract fixed rate – would have to be soft in the head) – now the worse thing that could happen is if more than one of these, happens at once, interest rate rise (if variable rate), out of a job, and or starting a family. 

Perhaps we should consider taking this assistance to your people entering the home ownership community a step further. Perhaps the Federal Government should loan direct to the Tax payers ?

That the loan would be guaranteed as paid by the Federal government for a period of say 10 years (minimum – or longer), or they would be able to liquidate other assets, such as superannuation towards an initial deposit… or to help with payments towards the house, as isn’t the prospect of keeping a house as an asset within a family a far better asset than currently the pathetic returns on superannuation.  Perhaps even the payments that his employer and the tax payer make that go towards superannuation – could go towards paying off his home loan.

Perhaps when the house is sold, the money borrowed from their super fund is returned – with no income tax component.

Talk to me…tell me what you think… lets create something that can make a difference..

 

 

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