When it comes to purchasing a residential property in Western Australia (WA), affordability is a major consideration. This is especially true for first-time buyers. Saving for a deposit and financing subsequent home loan repayments or construction costs can be a challenge.
The government recognises this and has put in place a number of different grants, tax rebates and other initiatives to help make the home buying process more accessible. The government is also committed to easing housing supply problems (which may lead to inflated prices for first-time buyers). This is why many schemes to help first-time buyers are related to the purchase or construction of new-build properties, rather than an existing property.
There are four schemes in total available to Western Australians, with the potential to be eligible for up to $70k of government assistance to build your first home.
The First Home Owners’ Grant offers first time buyers the opportunity to enjoy a welcome financial boost when it comes to the purchase of a new-build property. Although not an enormous amount of money, $10,000 can be enough to tip the balance in favour of a home purchase. Particularly if used in conjunction with some of the other benefits which developers offer to first-time buyers (for example access to low-cost home loans, partial deposit payments etc), it can make property ownership a more attractive and more realistic option.
If you are considering property ownership for the first time, it is important to weigh up all the options that are available to you (including the purchase of an existing property) and make the decision that's right for you. In some cases, even with the inducement of a first home owners' grant, it may be more financially prudent to purchase an existing property.
The first home grant is a set amount of money which the government pays across to eligible WA residents as part payment towards their first home purchase. To apply for a first home buyers' grant Western Australian residents need to be purchasing a brand new property. This can be a property that they are purchasing from a developer, or one which they have commissioned to be built by a contractor (or are building themselves).
Yes, although there are some stipulations. The list of eligible transactions under the first home owners’ grant in WA include purchases of new homes, comprehensive home building contracts and owner-builder agreements. You may be eligible for the grant if you are purchasing a new home that has not been lived in, are building a new home or are an owner-builder.
The grant is currently set at $10,000. Note that the grant is only available for properties of a certain value.
South of the 26th Parallel, the purchase / construction must be less than $750,000 to qualify for a grant. North of the 26th Parallel, the purchase / construction must be less than $1,000,000 to qualify for a grant.
To be successful in your application for government grants for first time buyers, you will need to satisfy the following criteria::
If you are confident that you satisfy the eligibility criteria, the next thing to do is to fill in the first home buyers grant application form. This can be found here. Your application will then be assessed with a view to deciding if you are eligible to receive the grant.
Yes, the $10,000 government grant for first home buyers is still currently available. In some circumstances it may be possible to apply retrospectively for an additional "boost" of $5,000. The criteria for a retrospective boost are summarised here.
At the moment there isn't a specific end date planned. That said, there's no guarantee that the current level of grant will be maintained in the future. Some states have already dropped their grant rate: year-on-year grant levels are dependent on what's available when the government sets its spending budget. We suggest that if you have identified a property, you apply promptly to avoid missing out.
It can do! It's worth remembering that in most cases government grants for first time buyers are paid across once the sales transaction has been completed. Because home loan lenders often wish to see that the deposit is readily available before approving the loan required to complete the purchase, they may be reluctant to lend if part of the deposit isn't physically in your bank account. Other lenders are happy with proof of indicative approval from the government. Speak to your lender regarding their position on using first time home buyer grants as whole or part of a deposit.
No. Although the grant can be used towards a "home and land package", it can't be used towards the purchase of land alone. That said, if the land is being bought for the purposes of building a property, you can obtain stamp duty relief on a sliding scale, depending on the land value: for land that costs $300,000 or less, full stamp duty relief is available.
Married couples are eligible to apply for the grant, provided they satisfy the requirements.
It is a requirement of receiving the grant that lone applicants, or at least one person in a joint application, is a permanent Australian resident.
No. It's not usually possible to be given the grant twice.
In some circumstances, yes. First time home buyers grant Western Australia stamp duty relief is provided on a sliding scale. Properties which cost $430,000 or less qualify for a full stamp duty rebate. For homes which cost more than this, conveyancing tax (also known as stamp duty or transfer duty) is payable on a sliding scale, rising as the purchase price increases. Note the maximum property values to qualify for the first home grant: it's possible to be eligible for the grant at the same time as needing to pay some stamp duty.
The first home buyers grant Australia wide is usually paid once the sale of the new property has been completed. If you are building your own property (or have contracted with a builder to do it for you), then the money will be paid once construction has started (this is usually once the foundations have been laid).
The HomeBuilder Grant is a nationwide stimulus package that has been formulated as a response to the economic hardship from COVID-19. The grant will apply to both renovations and new homes, and will total $25,000.
For new homes, the property value cannot exceed $750,000. Renovations cannot exceed $150,000 and cannot include pools or tennis courts. Singles must be earning $125,000 or less based on their tax return, and couples must have a combined income of less than $200,00.
Find more information here.
In an effort to stimulate the WA residential housing market and construction industry, the WA government has released its plan to further compensate those planning to buy or build their first home. This can be applied to contracts to build a new home or contracts to purchase newly built home as part of a single-tier strata scheme.
The Building Bonus Package entitles eligible parties to a payment of $20,000, provided that all requirements are met.
The beauty of this grant is that it does not disqualify you from any other home builder grants that are available in WA. There is now the potential for eligible parties to receive up to $69,440 in State and Commonwealth grants, including the First Homebuyers Grant, HomeBuilder grant, the first home buyer transfer duty concession and now the new Building Bonus grant.
Read more from the WA Government's official announcement here
The 2020 First Home Loan Deposit Scheme began on January 1st 2020. This scheme was formulated to encourage new home buyers through financial incentive. The scheme allows you to purchase a new home with reduced fees, while only requiring a deposit of 5% of the value of the property.
Banks and lenders usually take out Lender's Mortgage Insurance (LMI) when a new loanee doesn't have a 20% deposit ready to go, which incurs extra fees.
As part of this scheme, the government underwrites your loan so that LMI fees don't apply, and you only need a 5% deposit to start your home building journey.
In Western Australia, the value of the property cannot exceed $400,000 in metro areas and $300,000 in the rest of the state. Read more about this national scheme here.The information contained in this article is not legal or financial advice and should not be relied upon as a substitute for professional advice. Consumers should make their own independent inquiries and consider the need to obtain any professional advice relevant to their circumstances. Further information about the First Home Owners Grant is available at http://www.firsthome.gov.au/.