Helping hand for new home builders as WA set to expand apartment stamp duty discounts

June 8, 2020English

Helping hand for new home builders as WA set to expand apartment stamp duty discounts

June 8, 2020
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Talking points

  • The $20,000 ‘Building Bonus’ will apply to new builds or for the purchase a new property in a single-tier development prior to completion of construction.
  • It will complement the $25,000 on offer as part of the Commonwealth’s HomeBuilder scheme.
  • First-home buyers are still eligible for grants and stamp duty discounts, meaning they could rake in a $70,000 windfall if they act fast.
  • The state government’s cash bonus expires on December 31, 2020.

West Australians who build a new home will be given $20,000 by the state government in addition to the $25,000 on the table as part of the Commonwealth’s HomeBuilder scheme.

The $125 million package, designed to stimulate the state’s economy which is in recession following pandemic restrictions, also includes a $8.2 million expansion of stamp duty concessions for buyers of new apartments.

The state government’s scheme is not means tested, has no property value cap and is not limited to first-home buyers.

But the existing $10,000 First Home Owner Grant and stamp duty concessions would continue to apply, meaning WA first-home buyers could rake in a $69,440 windfall if they choose to build.

New builds would be eligible for the state government’s Building Bonus grants from June 4 until the end of the year.

Any home buyer who wishes to build a new house or purchase a new property in a single-tier development, such as a townhouse, prior to completion of construction would be eligible.

The state government’s 75 per cent stamp duty rebate for apartments bought off the plan would be extended to multi-tiered developments already under construction in addition to pre-construction contracts.

When the rebate was announced in October, 2019, it it was criticised by developers because it did not apply to projects already under way, creating a disproportionate benefit for apartment buildings not yet under construction.

The entire stimulus package was welcomed by the Urban Development Institute of Australia on Sunday.

It’s WA chief executive Tanya Steinbeck said it would create jobs and contribute to a sustained economic recovery in WA and predicted an immediate surge civil construction works across the metropolitan area as developers worked to prepare a range of titled land lots for buyers.

“The land development industry provides the platform for buyers to choose the location that suits their needs, with the amenity they require to create a place to call home that is bespoke to their individual requirements,” she said.

“There are 5000 land lots available across the metropolitan area over the coming months, combined with a diverse range of new home designs that provide the ultimate housing choice for those looking to take advantage of extraordinary economic circumstances.”

The Property Council of Australia described the announcement as an “absolute game-changer for Perth’s languishing residential property market”.

WA executive director Sandra Brewer said both the state and federal governments had responded swiftly to the economic destruction caused by the COVID-19 pandemic.

“We are pleased to see the state government chose to top up the federal government’s HomeBuilder scheme by $20,000 and increase the supply of social and affordable housing,” she said.

Premier Mark McGowan said the state government would spend $317 million on building 250 new social houses and refurbishing existing stock.

Ms Brewer also praised the move to add to the state’s social housing stock, which would “help absorb some of the pipeline of apartments under development and will accelerate projects to construction stage”.

“This will be a game changer for some developers who have experienced historically low levels of apartment presales, giving them a boost to be able to start construction,” she said.

State government’s housing stimulus package

  • $117 million for $20,000 Building Bonus grants provided to homebuyers who sign up before December 31, 2020 to build new houses or purchase a new property in a single tier development (such as a townhouse) prior to construction finishing.
  • $8.2 million to expand the 75 per cent off-the-plan transfer duty rebate, capped at $25,000, until December 31, 2020 to include purchases in multi-tiered developments already under construction.
  • $97 million to construct social housing dwellings and purchase off-the-plan units for supported housing programs.
  • $142 million to refurbish 1500 existing social housing dwellings.
  • $80 million for targeted maintenance programs for 3800 regional social housing properties – including remote Aboriginal communities’ stock and subsidised housing for regional government workers.

Source: WA Today