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What you need to know – Building Bonus (WA) and the Federal HomeBuilder Package

On 24 July, the Department of Finance, RevenueWA released its guidelines on the Federal Homebuilder and State Building Bonus grants. The Federal Homebuilder stimulus package will operate in tandem with the State Building Bonus and the First Home Owner grant. This means that some eligible applicants will be able to benefit from each of the schemes.

RevenueWA guidance on the:

  • HomeBuilder grant is available here; and
  • Building Bonus grant is available here.

The HomeBuilder grant provides eligible owner-occupiers $25,000 towards the cost of building or buying a new home or substantially renovating an existing home. The Building Bonus grant provides eligible owner-occupiers or investors $20,000 who enter into a contract to build a new home on vacant land or enter into an off-the-plan contract to purchase a new home as part of a single-tier development.

Information about the Federal HomeBuilder and Building Bonus grants and the differences are detailed below.

PACKAGE FEDERAL HOMEBUILDER PACKAGE WA BUILDING BONUS PACKAGE
Grant Amount $25,000 $20,000
WORK TYPES COVERED
  • Contract to build (house and land package).
  • Contract to build on land your client already owns.
  • Contract to purchase a new home (off the plan or speculative home).
  • Substantial renovation work, including ‘knock-down rebuild’.
  • A contract to build a new home on vacant land
  •  An off-the-plan contract to purchase a new home as part of a single-tier development
WORK TYPES NOT COVERED
  • Additions to property such as swimming pools, tennis courts, outdoor spas, saunas, sheds or garages (unconnected to property).
  • Stand-alone granny flats.
  • Work carried out by owner builders and investors.
  • Replacement transactions
  • Multi-tier developments
  • Completed Dwellings
  • Refurbished developments
CONTRACTS MUST BE SIGNED BETWEEN

4 June 2020 and 31 December 2020. Contracts signed before 4 June 2020 are not eligible.

WARNING: If the client/s have entered into a contract on or after 4 June 2020 that replaces a contract made prior to 4 June 2020 to build the same or substantially similar home, they may not be eligible to receive the Grant.
INCOME CAPS

For the 2018/2019 or 2019/2020 financial year:

  • $125,000 per annum for an individual applicant.
  • $200,000 per annum for a couple.
N/A
CONSTRUCTION TIMEFRAMES Building work must commence within 3 months of the date of signing the contract.

New Builds/Off the plan purchases: Construction commences when significant earthworks, excavations or physical building works commence.

Preparatory work such as site clearing, fencing, markings, delivery of building products will not be considered to be commencement of construction.

Substantial renovations: Commencement of construction is when works under the renovation contract starts.

Building work must commence within:

  • 12 months of the date of signing the contract for new detached homes
  • 6 months of the date of signing of the contract for single-tier developments
  • owner builder construction must commence between 4 June 2020 and 31 December 2020.

New Builds/Off the plan purchases: Construction commences when significant earthworks, excavations or physical building works commence.

Preparatory work such as site clearing, fencing, markings, delivery of building products will not be considered to be commencement of construction.
EXTENSION OF TIME

Revenue WA may allow an extension of time for commencement for up to a further 3 months for the HomeBuilder grant and beyond six months for for single-tier developments under the Building Bonus if delays are unforeseen and outside the control of the parties to the contract.

Examples of the criteria for exercising discretion includes, but is not limited to the following:

  • delays in obtaining council approvals;
  • difficulties in obtaining construction materials and/or sub-contractors;
  • inclement weather, where the disruption is substantial;
  • health problems relating to, or the death of, a person critical to the commencement of the project;
  • significant delays in the issue of title cause by Landgate;
  • prolonged industrial disputes;
  • natural disasters.

EVIDENCE TO SUPPORT COMMENCEMENT

New Builds/Off the plan purchases: Evidence of construction commencement i.e. a statement of other evidence from the builder.

Substantial Renovations: Evidence of construction commencement, including first invoice issued for work carried out under the renovation contract and receipt/s to show that $150,000 has been paid to the builder.

If applicable, a statement confirming reasons for the delays in construction commencement.
Declaration from builder that construction has commenced.
WHEN CAN MY CLIENT APPLY FOR THE GRANT AND WHEN WILL IT BE PAID?

New builds: After foundations have been laid and the first progress payment has been paid.

Substantial renovations: After construction has commenced and evidence is submitted showing payments of a least $150 000 of the contract price have been made.

Off the plan purchases: After construction has been completed and your client is the registered owner.

Applications must be made before 31 December 2020. Once the application has been submitted, from November 2020 your client will be able to upload further supporting information as it is available. Once all the supporting information is provided and eligibility has been confirmed, payment will be made by Revenue WA.

New detached home: After foundations have been laid but no later than 31 December 2021 or if the home has been demolished, once demolition has been completed.

Off the plan purchases: After construction has been completed and your client is the registered owner.

Construction is taken to have been completed on the date the strata plan is registered.

APPLICANT

The Applicant must be:

  • A natural Person (not a company or trust)
  • 18 years or over
  • An Australian Citizen
  • The registered owner of the vacant land on which the home will be built pursuant to the certificate of title; or
  • If buying vacant land with a building contract and the certificate of title for the land has not been issued at the date the building contract is signed, it must be issued in the Applicants name by the date that the foundations are laid; or
  • If buying a new home off-the-plan, the Applicant must be registered on the certificate of title as the owner of the property by 31 October 2022; or
  • If subdividing their own land, the Applicant can apply for the grant after foundations are laid on the proposed vacant lot if evidence is provided to show that the new land survey plan and certificates of title will be issued in the Applicant’s name. i.e. such as evidence the Western Australian Planning Commission has granted conditional approval of the proposed plan and lots.

The grant will be paid to all registered owners unless written authorisation to pay another person is provided by all owners.

The Applicant can be:

  • An Australia citizens, permanent residents and foreign persons
  • A natural persons, corporations and trustees
  • Named in the building contract and on the certificate of title. If the building contract is not in the name of the registered owner, supporting evidence must be provided to establish it is a bona fide arrangement.

You do not need to be living in WA to access the grant.

IMPLEMENTATION Department of Finance, RevenueWA
PROPERTY VALUE CAPS
  • New home $750,000 (including house and land and off the plan).
  • Substantial renovations the existing property not to exceed $1.5 million.
Not applicable
CONTRACT PRICE CAP
  • Contract value for new home not to exceed $750,000 (including house and land)
  • Contract value of substantial renovation between $150,000 and $750,000
Not applicable
BUILDER CRITERIA
  • All building work must be undertaken by a licenced builder.
TAX Non-taxable
TIMEFRAMES FOR APPLICATION

Application must be made by 31 December 2020.

New detached home: 31 December 2021

INTEGRITY MEASURES

Contracts must be made at arm’s length. This means the contract must be made by two parties acting freely and independently of each other, and without offering favour as a result of some special relationship, such as being related to one another.

The terms of the contract should be commercially reasonable, and the contract price should not be inflated compared to the fair market price.

One grant per lot of vacant land for new detached home construction.

One grant per dwelling for each off the plan contract by an eligible applicant.

No replacement transactions allowed.

Application Form

The application form for the client/s to complete is available here.

The client/s will have to provide information about their income, citizenship, certificate of title and building contract, or a copy of the sales contract for the purchase of an off the plan home/new home.

Related information

Contact a HIA Workplace Adviser on 1300 650 620 for further information and advice

Current at: 20 October 2020
HIA ref no: WFSIRR1334B