WA's first homeowner grant for new homes will be slashed after the state government announced plans to bail out of its temporary boost payment scheme earlier than scheduled.
The payment will drop from $15,000 back to $10,000, and the changes will come into effect on June 30, 2017, six months after the former Barnett government announced the incentive.
Treasurer Ben Wyatt said despite the boost being scheduled to cease at the end of the year, the state's dwindling finances meant it had to be cut short.
"Ceasing the boost early will allow the State Government to fund higher priority areas while ensuring Western Australian first home buyers continue to be eligible for generous Government assistance," he said.
"This action represents another $20 million saved over the forward estimates. It's another step towards budget repair."
Treasury estimated the reduction in the grant will deter around 550 people from purchasing their first home in the second half of 2017, while around 90 people would likely bring their purchase forward to beat the mid-2017 deadline.
Figures showed the number of people purchasing a new home under the scheme had reduced from 2,951 between January to April 2016, compared to 2,364 during the same period in 2017 - despite the additional $5,000 boost.
The state government ceased providing the first home owner grant to people buying established homes in late 2015.