For those in Western Australia, there’s good news. Apart from the recently announced HomeBuilder scheme, first home buyers can get up to $20,000 more from the state government. The state already has the existing $10,000 exclusively for first homeowners, along with stamp duty concessions. All in all, WA citizens buying homes for the first time can get almost $70,000 of cash aid from the government.
The grant is a part of the $125 million stimulus package, which is designed to bolster the potentially dwindling economy. Currently, it is in recession due to the tight pandemic restrictions. However, with the state and federal government initiatives in place, the country may soon see the light at the end of the tunnel.
It also includes the $8.2 million budget, which is directed towards the expansion of stamp duty concessions for new apartment buyers.
New Builds to Take Advantage of the Scheme
The additional $20,000 stimulus package of the state is not means-tested, inviting many people to try their luck and apply. It also does not have a cap on the value of the property. Plus, you may be able to get the grant even if you are not a first-time homebuyer in WA.
Evidently, homeowners and those planning to build a house should use this scheme to their advantage. Unlike the HomeBuilder program, it does not have many restrictions. However, it is crucial to differentiate this additional package from the existing First Home Owner Grant. This particular grant provides a $10,000 extra funding to first home buyers in the state. Also, stamp duty concessions will still be applied.
Therefore, this new scheme, along with the other existing government programs, gives a superb opportunity to first home buyers in WA. It is because they could rake in $69,440 if ever they choose to build.
As with the HomeBuilder scheme, the focus is to keep construction jobs going. New builds are eligible for the Building Bonus grant, which is provided by the state government. It runs starting 4 June until the end of the year.
If you are a homebuyer and you wish to purchase a new property or build a new one, you can apply for this grant. Of course, there will be a few requirements that you need to meet. For instance, it is crucial that you focus on purchasing a property in a single-tier development, which includes a townhouse. You should already have the deal on the table before the construction is complete for you to be eligible.
More Rebates from the State Government
The WA government has a 75% stamp duty rebate ongoing for apartments. These apartments, however, should be purchased off the plan. The good news though is that this rebate will also be applied to multi-tiered developments. Take note that the same requirement is enforced, in which the property should already be under construction to apply for the stamp duty rebate. Also, preconstruction contracts should be in place for those that have not begun building.
As a summary, here is the housing stimulus package of the Western Australia government:
- The $117 million budget will take care of the $20,000 Building Bonus grants. These grants will be provided to homebuyers who should sign up for a new build or purchase before 31 December 2020. It is crucial to understand that the property is considered a single-tier development and the signing should be performed before construction is finished.
- The already existing 75% off-the-plan stamp duty rebate will have an additional budget of $8.2 million. The expansion is capped at $25,000 and will continue until the end of the year. It provides coverage of multi-tiered properties, which are already being constructed.
- Another considerable support for the ongoing housing programs in the state is the $97 million plan for the construction of social housing dwellings. The funds will also be utilised for purchasing off-the-plan units across Western Australia.
- Additional $142 million is injected to the stimulus package, which will help in refurbishing 1,500 social housing dwellings.
- Finally, there is also a total of $80 million budget, which is for maintenance programs. These programs are directed towards 3,800 local social housing properties. They include Aboriginal communities and areas that have stock and subsidised homes. The remote housing will be used for regional government workers.
Prospective home buyers have a lot to rejoice about. Plus, it is expected that the housing package can support around 2,600 jobs across the state, which include 780 in regional WA.
Sustaining the Economy by Creating Jobs
At the announcement of this particular rebate last year in October, a few developers complained about it. The criticism stemmed from the fact that the 75% stamp duty concession did not apply to projects that were currently underway. There was a clear disproportionate benefit for those buildings that have not yet started their construction process.
As an answer to the gripes of the developers, the rebate was expanded to projects underway. And the developers and builders gladly welcomed this change.
The Urban Development Institute of Australia (UDIA) was among the associations that were pleased with the whole stimulus package. There is a strong belief between experts and groups that the Building Bonus, as well as other grants and programs, can contribute to sustaining and creating jobs in the construction sector. This benefit has a huge impact on the economic recovery of the state. It is even predicted that it will lead to an immediate surge in construction activities, particularly in the metropolitan areas.
Developers are already preparing a wide range of land lots for first home purchasers. With the land development industry getting more accessible, buyers can now choose the best location for them. People have various wants and requirements when it comes to calling a place their home. Amenities are also considered, but what matters is that the property is bespoke to their individual needs.
These facts are considered essential factors as to why there is anticipated growth in the number of building projects for the next several months.
At the moment, there are about 5,000 land lots that are ready for purchase in and around the metropolitan area. These sites will remain available for the coming months and perhaps until the end of the year. With the emergence of the Building Bonus and the HomeBuilder scheme, first home buyers will surely want to grab their spot before it is too late.
The diverse range of home designs is also among the reasons why people want to buy. They are prepared to take advantage of the situation even with the odd economic circumstance.
The package may help provide work opportunities, including those in regional areas. It would also facilitate in propelling the economic recovery of the state. Part of the expected results is that the stimulus package will create more liveable and contemporary properties.
An Absolute Game-Changer
The residential property market in Perth is not at its best moments. Languishing conditions need urgent attention. Thankfully, the announcement of the stimulus package, along with other government programs, is quite timely.
Both the federal and state governments provided swift responses to the economic destruction that the COVID-19 pandemic has caused. Many people, even the critics, are pleased with the state government’s initiative. The authorities opted to top up the ongoing HomeBuilder scheme of the federal government. With the added $20,000 and the increased affordable housing supply, WA citizens have a lot to be thankful for. Also, it has created an enormous opening for potential homebuyers to purchase their first home amidst the pandemic.
According to Premier Mark McGowan, the Western Australian government is willing to spend up to $317 million. It will be allocated toward building approximately 250 social houses while adding to the existing housing inventory.
The move to increase the current social housing stock also has other benefits. For one, it would undoubtedly help absorb the pipeline of apartments that are already in development. Additionally, it will assist in accelerating projects, which have already moved on the construction stage.
These initiatives are indeed game-changers, specifically for developers. Many of them have experienced low levels of presales in their apartments. It is quite unfortunate that the pandemic led to historically weak numbers. With the bonus and other programs, they will get the needed boost to start construction once again.
More Information about the Building Bonus
The Building Bonus package indeed has numerous benefits. However, the citizens who should take advantage of the grant are those planning to build a new home. You are required to enter into a contract, which states that you will purchase a home, which is currently in construction. You can also apply if your deal involves you building a new home on empty land. Once again, it is essential to note that the development should be under a single-tier strata plan.
The specific contract should be entered anywhere from 4 June 2020 to 31 December 2020. As described above, there are two types of grants under this scheme. If you have received one of them, you may still be eligible for the First Home Owner Grant (FHOG).
The purchase price is not capped, as well as the value of the contract. Furthermore, if you are qualified, you can get multiple grants as payment. However, they will be given to you on separate transactions based on the criteria for the grant you applied for.
A frequently asked question about the Builders Bonus concerns the HomeBuilder scheme. Let us say that you have received your HomeBuilder payment. Does it mean you can no longer apply for the bonus? The good news is that you can, and it is possible to get the additional grant as well. Therefore, you can add the $25,000 on top of the $20,000 bonus from the state government.
Before applying, however, you should understand the requirements. The criteria will depend on your situation.
For instance, if you plan to build a detached home, you should meet the following conditions:
- You should be the registered owner of the empty land where the new house will be built.
- If there are several owners, the grant will be divided amongst them. An exception to this rule is if there is a written consent to pay another person. All owners of the land should agree with the payment recipient.
- Only one grant will be provided per vacant land. It does not matter how many homes are in the area.
- The construction project should entail a home or precisely a detached residence. Therefore, the property should not be built for commercial or mixed-use purposes. It is wholly for residency, which also excludes short-stay accommodation.
- As a detached residence, it should not share walls or other structures with existing and newly built buildings.
- Another important requirement is that the land should be entirely vacant. If there is already a building or house on the property, you cannot qualify for the grant. There is a workaround for your application to be approved. And that is to ensure the building is demolished. You will receive the grant payment right after the building is completely wiped out of the land.
- Finally, the building contract should be in your name if you are the registered landowner. If it is not, you will have to provide supporting evidence that establishes the authenticity of the arrangement.
The requirements are different when you plan to build a new home on a single-tier development. You can receive the grant only if you enter an off-the-plan contract. It should state your intention to purchase a brand-new house in the mentioned scheme before the completion of the development. Once again, you should be the registered owner of the land where the new home will be built. Also, the house will be constructed based on section 3(1) of the Strata Title Act 1985.
It is not allowed to use the contract as a replacement or cancelled transaction. Since it is a single-tier development, it should never be a part of a multi-tier property.
If you are an owner-occupier or an investor, an Australian citizen or foreign, or even a corporation, you can apply for the grant.