How can I take advantage of the new WA Building Bonus Scheme?

The Government has announced two new grants aimed at promoting investment in the WA residential market and stimulating jobs in the construction industry.  These Building Bonus Package grants are available for people who enter into a contract to build a new home on vacant land or purchase a new home being constructed under a single-tier strata plan. The grant totals $20,000 for eligible participants. This is a flat amount regardless of how much you spend on building a new home.

The Building Bonus Scheme starts on 4 June 2020 and ends 31 December 2020. There is no cap on the purchase price or value of the contract nor is there any means testing for the grant. Multiple grants can be paid to the same applicant on separate transactions that meet the criteria for each grant.

The grant is available to owner occupiers, investors, Australian citizens, foreign persons, natural persons, corporations, and trustees. You do not need to be living in WA to access the grant. The grant is paid directly to the applicant rather than to the bank (if under a loan). Contracts signed before 4 June 2020 are not eligible for the Building Bonus grant.

Building a new home on vacant land

To be eligible for this grant, you must be the registered owner of the vacant land on which the home will be built. The grant will be paid to all registered owners unless there is written authorization to pay another person. This authorization must be provided by all the registered owners.

One grant will be paid in relation to each vacant lot of land regardless of how many homes will be built on the land.

The criteria include:

• The home to be constructed must be a detached residence i.e. it cannot share walls or roof structures with any other buildings.
• The home cannot be for mixed use, commercial purposes or short stay accommodation.
• The land must be vacant. If the land already has a building on it, the grant will only be paid after the building is demolished.
• The building contract must be in the name of the registered owner of the land.
• The contract must be entered into between 4 June 2020 and 31 December 2020.
• Construction must commence within six months of entering into the contract.
• If you are an owner builder, you must commence construction of the new home on the land between 4 June 2020 and 31 December 2020.

Applications for the grant can only be submitted once construction has commenced i.e. when the foundations of the home have been laid. Applications must be submitted by 30 June 2021.

Purchasing a new home being constructed under a single-tier strata plan

To be eligible, you must be the registered owner of the land on which the new home is built and you must be the buyer named in the off-the-plan contract. One grant will be paid in relation to each dwelling.

The criteria include:

• The home to be constructed must be part of a single-tier development.
• The home cannot be a replacement transaction. A replacement transaction is an agreement between the same parties as the cancelled transaction that is substantially similar in effect to the cancelled transaction.
• The home cannot be a completed dwelling that is held by the developer or another person.
• The home cannot be part of a refurbished development including those where the original property is extended or renovated.
• The contract must be entered into between 4 June 2020 and 31 December 2020.
• Construction must commence within six months of the contract date however you may apply to the Commissioner to extend the commencement date.

You may apply for the grant once construction has been completed and you are the registered owner of the property.

Access to the Building Bonus grant does not impact access to both  State and Commonwealth grants, the existing $10,000 First Home Owner Grant and the first home buyer transfer duty concession for eligible first homebuyers.

If any of the new building packages impact you or you would like to discuss eligibility and application, please contact one of our Team on (08) 9316 7000.

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June 2020 Reserve Bank Decision

At its meeting today, the Reserve Bank of Australia (RBA) has kept the official cash rate at the historic low of 0.25 per cent.

RBA governor Philip Lowe said in the previous meeting that the RBA is prepared to scale up its bond purchases if needed. They will do whatever necessary to ensure bond markets remain functional and achieve the yield target of 0.25 per cent on 3-year Australian Government bonds until progress is made towards full employment and inflation. The RBA is confident that inflation will be sustainably within the 2-3 per cent target band.

Click on this link below to read the article.

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