The West Australian Government has unveiled a $125 million stimulus package for the state’s home building sector, providing cash grants to prospective homebuyers.
Under the $117 million “Building Bonus” scheme, WA homebuyers — both owner-occupiers and investors — who build a new house will be eligible for a $20,000 grant.
Homebuyers who purchase a property in a single-storey development which is already under construction — such as a townhouse development — may also apply for the grant.
The scheme will not be means tested and there will be no property value caps.
The Government’s announcement comes within days of a similar scheme unveiled by its federal counterpart, which will provide grants of $25,000 for new builds or renovations by owner-occupiers who spend at least $150,000 of their own money, subject to a household income cap.
The WA grant means new homebuyers who meet income criteria for the federal package could receive $45,000 in government assistance.
That figure rises to $69,440 if the buyer is a first home owner and eligible for the existing $10,000 first home owner grant and stamp duty concession.
As part of its new package, the Government will also extend a 75 per cent stamp duty rebate — a stimulus introduced last year for off-the-plan apartments — to include apartment projects currently under construction.
This rebate — capped at $25,000 — will only be available to owner-occupiers.
So, if you were even half entertaining the idea of building or (substantially) renovating, now would be the time to take a serious look.
Here, we answer a few of the standard questions surrounding the Federal and State stimulus.
Federal Government $25,000 “HomeBuilder” stimulus
- You need to be an adult Australian citizen with a taxable income less than $125,000 a year. If you live with your partner, your combined income has to be less than $200,000 per year
- Before the end of the year, you need to enter a contract to renovate or build your main place of residence, with construction to begin within three months of the contract date (no investment properties)
- For renovations, you need to spend between $150,000 and $750,000 of your own money, and the house you’re renovating must be valued at less than $1.5 million prior to renovations
- Renovations need to improve the accessibility, safety or liveability of the home and don’t include external work like swimming pools, tennis courts and sheds
- For new builds, the total value of the completed home needs to be less than $750,000, including land
- Should you meet the criteria, there is still a handful of requirements on the contract side including having the contract negotiated at fair market price and having no special relationship with your contractor.
- All works need to be conducted by a registered or licensed builder, depending on your state or territory.
WA State Government $20,000 Building Bonus Grant
- A grant of $20,000 is available for eligible applicants who enter into a contract to build a new home on vacant land or enter into an off-the-plan contract to purchase a new home as part of a single-tier strata scheme.
- The contract must be entered into between 4 June 2020 and 31 December 2020.
- If you receive one of these grants, you may still be eligible to receive the first home owner grant.
- There is no cap on the purchase price or value of the contract.
- Multiple grants can be paid to the same applicant on separate transactions that meet the criteria for each grant.
- The Building Bonus Scheme starts on 4 June 2020 and ends on 31 December 2020.
- Eligible first homebuyers will be able to access both State and Commonwealth grants, the existing $10,000 First Home Owner Grant and the first home buyer transfer duty concession, meaning potentially up to $69,440 could be provided to WA first homebuyers.
- The grant is available to eligible Owner occupiers and investors, Australian citizens and foreign persons, Natural persons, corporations and trustees
- You do not need to be living in WA to access the grant.
- A grant is available for each new home built or purchased as long as the homes are on separate land titles. Only one grant will apply if more than one new home is built on a single lot.
- Construction must start within six months of entering into the building contract. This is different from the Commonwealth Government’s HomeBuilder scheme, which requires construction to start within three months of entering into the building contract.
- Contracts signed before 4 June 2020 are not eligible for the Building Bonus grant.
There’s a lot to take in and the fine details (particularly of the Fed Govt. scheme) are still being finalised but that shouldn’t stop you asking the question of whether this is a good opportunity for you.
If you would like to chat through how much you can afford, or organise a pre-approval, we’re happy to help so please get in touch asap.
All lending subject to status and lenders criteria. Terms & conditions apply. This document contains general information only. Your own personal circumstances have not been considered and you should seek independent financial advice prior to making any decision on a financial product.