The Federal and WA State Government have recently both announced grants totalling $45,000 to support the build of new homes or the renovation of existing homes. Where these grants are combined with existing measures for first home buyers, eligible participants can receive payments and support of nearly $70,000.
As a result of concerns about the construction and housing industry and the potential significant impact of the tightening of the economy as a result of COVID, both Federal and WA State Governments have announced grants to support the industry.
Federal Government Grant
On 4 June the Federal Government announced the HomeBuilder grant which provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home.
- You are a natural person (not a company or trust);
- You are aged 18 years or older;
- You are an Australian citizen;
- You meet one of the following two income caps (based on 2018/19 or 2019/20 tax returns):
- Individual – $125,000 per annum; or
- Couple – $200,000 per annum.
- You enter into a building contract between 4 June 2020 and 31 December 2020 to either:
- Build a new home as a principal place of residence (meaning it cannot be an investment property), where the property value does not exceed $750,000; or
- Substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property does not exceed $1.5 million;
- Construction must commence within three months of the contract date
The renovation works must be to improve the accessibility, safety and liveability of the dwelling. It cannot be for additions to the property such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages (unconnected to the property).
Process and timing
The Federal Government will utilise existing state mechanisms to distribute the HomeBuilder payments. At this stage the Western Australian Government have not provided details on how to apply for this scheme however you can register for updates here.
More information regarding the Federal Government grant can be found here.
State Government Grant
On 7 June, the WA State Government announced an additional grant for $20,000 which can be used to complement the Federal Government’s grant.
- Enter into a contract to build a new property on vacant land or;
- Enter into an off-the-plan contract to purchase a new property as part of a single-tier strata scheme;
- Multiple grants can be claimed by the same applicant for separate transactions that meet the criteria for each grant, noting that only one grant will apply if more than one new home is built on a single lot;
- You enter into a building contract between 4 June 2020 and 31 December 2020;
- Construction must commence within 6 months of entering into the contract.
We note that State grant is more widely accessible:
- There are no caps on the purchase price or contract value
- The grant can be used on investment properties in addition to principal places of residence
- The grant providers a wider pool of eligible owners, including foreign persons, companies and trustees.
More information regarding the State Government grant can be found here.
What does it all mean?
We note that both grants can be used in conjunction with 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 home buyers.
For more information on these grants please contact your Hall Chadwick advisor.
Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the eligibility criteria to their specific circumstances.
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