Queensland Treasurer Andrew Fraser has announced a price cap on the state’s first home owner grant, with the $7,000 in aid to only apply to houses worth less than $750,000 by mid-2010.

As of 1 January 2010, legislation will kick-in that will restrict the grant to homes worth up to $1 million, but the state government has committed to going even further.

“Queensland led the way with our policy to restrict the First Home Owners Grant to homes worth less than $1 million,” Mr Fraser contended. “We need to ensure this grant is made available for those who most need it.

“No reasonable person would suggest that someone buying a first-home worth more than $1 million needs a $7,000 grant from the state government to get them started.

“While measures passed in legislation to limit the grant to homes worth less than $1 million begins today (1 January 2010), the government has now approved measures to further restrict the grant to homes worth less than $750,000.”

The changes will be voted on early in the new year.

“Research shows that most FHOG applications are made for houses valued at lower than the average capital city house price, which in Queensland is around $410,000,” Mr Fraser noted.

“This reflects the underlying purpose of the grant – to help first home buyers afford to enter the property market.”