To mitigate the forecast impact of the Covid19 pandemic on the Australian economy, the Australian Government announced its HomeBuilder Scheme on 3 June 2020. The construction industry support package is designed to assist industry, home owners and new home buyers alike.
Grants include, HomeBuilder valued at $25,000 which is additional to existing Western Australian State Government’s First Home Owners Grant ($10,000), the new Building Bonus Package ($20,000) and ZERO Concessional Stamp Duty on houses valued below $430,000. * Conditions apply.
New Incentives boost grants for Western Australian Home Buyers
Western Australian first home buyers now have access to a potential pool of nearly $70,000 worth of grants, incentives and stamp duty relief.
The Western Australian Government’s Building Bonus Package valued at $20,000 for residential new-builds has been welcomed by the building and construction industry and aspiring home buyers. The $20,000 grant is in addition to the existing $10,000 WA State Government grant offered to First Home Owners Grant and the $25,000 offered by the federal HomeBuilder scheme.
This takes the potential savings for Western Australian first home buyers to $55,000 before any stamp duty concessions. Based on a purchase price of $430,000, an eligible first-home buyer could save $14,440 in stamp duty rebates.
First Home Owners Grant unpacked
The Western Australian Government offers the First Home Owners Grant to eligible applicants. A once-only payment assists first home buyers to build a residential property for use as their primary residence.
The $10,000 grant is paid to individuals who build a new home or purchase a new or extensively renovated home. The grant is not available for the purchase of an established home or for renovations to your existing home.
The scheme is a once only grant which is payable per eligible property transaction. For example, two people purchasing a house together are only entitled to receive one grant.
To be eligible for the First Home Owners Grant, at least one applicant must be an Australian citizen or a permanent resident at the time of making application.
Applicants and/or their spouses or de facto partners cannot have
- previously received the grant or first home owner rate of duty from any jurisdiction in Australia
- owned residential property anywhere in Australia before 1 July 2000
- owned residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence before 1 July 2004
- owned residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence for a continuous period of at least six months that began on or after 1 July 2004.
In addition, recipients must occupy the home as their principal place of residence for a continuous period of at least six months. Home buyers must occupy the home within 12 months of settlement. Home builders must occupy the home within 12 months from the date of completion.
Owner-occupiers and investors benefit from the new WA State Building Bonus package
Announced as part of a $125 million stimulus package for the State’s home building sector, the Western Australian Government is providing cash grants to prospective homebuyers through the Building Bonus Package.
The $20,000 grant for residential new builds has been welcomed by the building and construction industry and aspiring home buyers. The Building Bonus Package is open to anyone building a new home in Western Australia for contracts entered into between 4 June 2020 and 31 December 2020.
The $20,000 grant 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 development on a strata plan or other land survey type.
The Building Bonus Package is in addition to the existing the WA State Government First Home Owners Grant ($10,000), and the $25,000 offered by the federal Government’s HomeBuilder Scheme.
Building Bonus Package unpacked
Unlike the First Home Owner Grant, the $20,000 WA State Building Bonus Package is open to eligible owner-occupiers and investors building a new house in Western Australia, including properties which are part of a single-tier strata scheme such as town houses.
The main points of difference:
- This scheme is not means tested.
- There are no property value caps.
- The scheme is open to investors so you don’t have to live in the home.
- Open to people who do not live in WA such as FIFO workers.
- Available to people who are not Australian citizens, so Permanent Residents can apply.
The Building Bonus Package is set to run for just over six months, with grants available until December 31, 2020. People who are eligible for the First Home Owners Grant may also apply for the Building Bonus Package.
HomeBuilder – helping new home buyers and renovators
Valued at $25,000, the HomeBuilder package is designed specifically to boost new projects between now and the end of the calendar year.
It will apply to new home construction and major renovations only and applies to building contracts signed between 4 June 2020 and 31 December 2020.
To comply, construction or renovation must commence within three months of the contract date.
HomeBuilder is a Commonwealth Government initiative worth $25,000. It’s payable to eligible homeowners planning to build a new home, or substantially renovate an existing home in 2020. The package is also open to First Home Buyers planning to build a new home.
As with any grant, there are some terms and conditions:-
- The scheme is only available to Australian citizens over the age of 18 years – companies and trusts are excluded.
- New homes which will be used as an investment property or renovations to an existing investment property are not eligible for the HomeBuilder grant.
- Grants are means tested with personal income capped at $200,000 per year for couples or $125,000 per year for individuals.
- New home builds and off-the-plan purchases are capped at $750,000 (combined house and land value). All dwellings (house, apartment, house and land package, off-the-plan) are included.
- Renovations must be carried out by a registered or licenced builder and be valued at over $150,000 on a property valued at less than $1.5 million (combined house and land value).
- Building a home on vacant land purchased before 4 June 2020 is eligible for the grant if the total value of the land and new build does not exceed $750,000.
- If you own a property which you plan to detonate and develop, the project is classified as a major renovation. The HomeBuilder criterion requires the renovation price range to meet $150,000 – $750,000 threshold and the total value (combined house and land) of the property does not exceed $1.5 million pre-renovation.
- The scheme will not apply to owners planning DIY building or renovating projects without the help of a registered builder.
- To be eligible, renovations and improvements must improve accessibility, amenity or safety to the main dwelling. Swimming pools, spas, tennis courts or other free standing structures such as sheds or garages are excluded.
First Home Buyers Stamp Duty Rebates
How does zero stamp duty sound? Individuals eligible for the First Home Owners Grant may also be eligible for the First Home Owner Rate of Duty. The rebate (often referred to as stamp duty) is not available to companies or trusts. For eligible first home buyers purchasing a house valued under $430,000 the duty payable is zero, representing a saving of $14,440. For more expensive properties, you can calculate the duty payable by using the Office of State Revenue Transfer Duty Calculator.
The concessional First Home Owner Rate of Duty can only apply to an eligible transaction where the unencumbered value of the home is less than $530,000 or for the purchase of vacant land where the unencumbered value of the land does not exceed $400,000.
Off-the-Plan Duty Rebate (pre-construction)
People entering into a pre-construction contract to purchase a new residential unit or apartment commonly known as off-the-plan may apply for the Off-the-Plan Duty Rebate Scheme.
The rebate is available to owner-occupiers and investors purchasing a new residential unit or apartment.
The rebate is calculated at 75% of the duty owing and is capped at a maximum of $50,000 for pre-construction contracts.
Off-the-Plan Stamp Duty Rebates Extended
The Government has committed to extending a 75% stamp duty rebate for off-the-plan apartments which are currently under construction. This rebate is capped at $25,000 and applies to owner-occupiers for contracts signed between 4 June 2020 and 31 December 2020. More information can be found here.
Duty rebates are usually paid at the date of property settlement. Full details and an application form can be found here.
Need help to navigate the details?
Talk to an expert at Residential Settlement Services on (08) 9459 0044 or email your enquiry using our simple online contact form.