Last October the Government tripled the $7000 first home owners grant to $21,000 for new properties, and doubled it for existing homes.

The boost, which was part of the $10.4 billion stimulus package, was designed to insulate the building industry from job losses caused by the global financial crisis.

It was due to expire on June 30, but under changes announced in the budget tonight, people who enter into contracts on or before September 30 will still be eligible for a grant of $14,000 for an existing dwelling and $21,000 for a new home.

The more generous scheme will then been phased down, and end after December 31.

Between October 1 and December 31, the boost will be halved, meaning first home buyers will receive a total of $10,500 for established homes and $14,000 for new homes.

After the introduction of the grant last year, the real estate market experienced strong demand from first home buyers.

Demand was also fuelled by a lower interest rate, which now stands at a 49-year low of three per cent.

Treasurer Wayne Swan said the first home owners boost had already helped 59,000 people achieve the great Australian dream.

“In light of the continuing global uncertainty and the success of this initiative, tonight, I announce that we will extend the boost for a further six months, including three months at the full rate before stepping it down,” he said in his budget speech.