Buy now pay later

Australian Institute of Architects says first home buyers grants should be axed and replaced with "Hecs - Style" interest free government loans.

It has been proposed by Archicentre a national advisory service for the Australian Institute of Architects, that the first home buyers grant be raised to $30,000 and paid back on the sale of the property.

The program would be based on the same scheme as the Higher Education Contribution Scheme, whereby a student pays back the cost of a degree once he is employed and income reaches a certain level.

Archicentre managing director Robert Caulfield said that the grant scheme was a big burden on taxpayers and in the end you do rob Peter to pay Paul.

The state and federal grants for first home buyers though very welcome still fall short. The number of new house starts is the lowest it has been in years.

Mr. Caulfield also stated that the whole system needed to be revised and required more creative ideas.

All contracts on new homes for first home buyers presently qualify for the Federal Governments grant of $7000 to $21,000. It doubles to $14,000 on existing properties. Mr. Caulfield further stated that the entire grant scheme was outdated and taxpayer's money would be better spent funding a 'rolling fund'.

He further suggested that as the amount being paid back would not incur any interest charges and as most people move every seven to ten years, the capital would more than compensate for the 'payback'.

Developers and builders have revealed plans to build economy housing to cater for buyers requiring your basic everyday home. Many people are also looking at cheaper alternatives for the interior and exterior.

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Published on November 11-th, 2008 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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