A lot has changed in the last year and federal and state governments have introduced a range of incentives to help the property and construction industries through the economic impact of COVID-19 pandemic.
Many of these incentives have been aimed at first home buyers and we have seen first-hand an increase in first home buyer activity. The HomeBuilder grant in particular has smashed expectations with over 75,000 households applying for the grant. Whilst these grants were introduced last year it’s not too late to take advantage of most of them.
In this national guide we’ve summarised the key incentives for residential property buyers throughout Australia that are still available.
On 4 June 2020 the Australian Government announced HomeBuilder to provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to go towards the costs of building a new home, substantially renovating an existing home or buying an off-the-plan home/new home. Eligible owner-occupiers included those who had a sole income of up to $125,000 or a joint income of up to $200,000 for couples. Eligible contracts included those entered into between 4 June 2020 and by 31 December 2020 and where construction commenced within 3 months of the contract date and where the property values were below the thresholds. The national property value threshold for new builds was $750,000 and $1.5m for substantial renovations (over $150,000 in cost).
This grant was going to end on 31 December 2020, but on 29 November 2020 Australian Government announced HomeBuilder would be extended to 31 March 2020 with a grant of $15,000 for building contracts (new or substantial renovations) entered into between 1 January 2021 and 31 March 2021. The construction commencement timeframe for all contracts signed after 4 June 2020 was also extended to 6 months after the contract date. The property value threshold for new build contracts in New South Wales and Victoria increased to $950,000 and $850,000 respectively for contracts signed between 1 January 2021 and 31 March 2021 and remains unchanged elsewhere.
The HomeBuilder Grant is administered by each State and Territory and eligible applicants need to apply for the HomeBuilder Grant through their State or Territory revenue office. The cutoff date for the HomeBuilder Grant application (both for the full $25,000 and reduced $15,000 grant) is now 14 April 2021 but supporting evidence can be provided later. The HomeBuilder grant for off-the-plan purchases and purchases if new builds is only paid after settlement. Lawlab can assist property buyers with their HomeBuilder applications during their property conveyancing journey.
New South Wales
First Home Buyers Assistance scheme
From 1 August 2020 there are increased exemption and concession thresholds for purchases of new homes and vacant land to build a new home. If you are a first-home buyer you won’t pay any stamp duty at all if your new home property value is up to $800,000 or your vacant land value is up to $400,000. Concessional (discounted) stamp duty also applies for new home property values between $800,000 and $1,000,000 and for vacant land values between $400,000 to $500,000.
The exemption threshold for first home buyers of existing homes at $650,00 remains unchanged as does the concessional stamp duty threshold for first home buyers of existing homes between $650,000 and $800,000.
Proposed abolishment of stamp duty
The New South Wales Government also has recently indicated that they intend to change the State’s stamp duty system. The proposal is to offer an annual land tax as an alternative to the current significant stamp duty payable upfront when buying a property and thereby lower the barrier to entry on buying a home.
Stamp duty discount
In last November’s budget, the Victorian Government announced the introduction of a new stamp duty initiative across the state in order to stimulate its housing market.
Buyers of newly built homes (defined as homes that are no less than 5 years old and have not been sold previously) or off the plan properties with a purchase price of up to $1 million will be eligible for a 50% discount on stamp duty. By way of an example, an owner occupier buyer who purchases a newly built home for $700,000.00 will save $18,535.00 on stamp duty.
Buyers of existing homes will be eligible for a 25% discount on stamp duty which is also capped at a purchase price $1 million.
The stamp duty discounts apply to contracts entered into on or after 25 November 2020 and before 1 July 2021 and apply to all types of buyers including first home buyers, owner occupier buyers and residential property investors.
The stamp duty discount applies after all other eligible benefits, such as the first home buyer duty concession, the principal place of residence concession and the pensioner concession, have been taken into account. However, the waiver does not apply to foreign purchaser additional duty.
Regional Home Building Boost Grant
On 16 June 2020 the Queensland Government introduced the Regional Home Building Boost Grant that provides further assistance to those living in regional Queensland. The grant of $5,000 is paid on the completion of a purchase or the construction of a brand-new home valued at less than $750,000 and had applied to contracts entered into between 4 June 2020 and (now extended to) 31 March 2021. Regional Queensland is considered to be the following areas of the State: Cairns, Central Queensland, Darling Downs Maranoa, Mackay – Isaac – Whitsunday, Queensland – Outback, Toowoomba, Townsville, and Wide Bay. This grant may be paid in addition to the Federal HomeBuilder Grant and the existing First Home Owner Grant.
New Home Construction Grant
The West Australian Government offered a grant of $20,000 for eligible buyers entering into a contract to build a new home on vacant land, or entering into off-the-plan contracts for a new home in a single tiered development between 4 June 2020 and 31 December 2020. The grant has not been extended for new contracts after 31 December 2020 but the requirement to commence construction of a new home has been extended for 12 months after the contract date.
Whilst there were no new COVID-19 incentives for property buyers, there is land tax relief available for residential property landlords.
Tasmanian Homebuilder Grant
The Tasmanian Homebuilder Grant is a grant of $20,000 available to eligible owner-occupiers of new home builds where the contract is signed from 4 June 2020 and (now extended) to 31 March 2021. The grant is not available for the substantial renovation of your existing home but it is available for the demolition and building of a new home. This grant may be paid in addition to the Federal HomeBuilder Grant but is not available in addition to the existing First Home Owner Grant.
Australian Capital Territory
Stamp duty concessions
The ACT Government is offering stamp duty concessions for eligible owner occupier home buyers for contracts exchanged between 4 June 2020 and 30 June 2021. There will be no stamp duty for purchasers of vacant land building one new house on it and off the plan units and townhouses purchases up to $500,000. A stamp duty discount of $11,400 applies to off the plan units and townhouses purchases between $500,000 and $750,000.
The BuildBonus grant was introduced by the Northern Territory Government in February 2019 but was recently extended to help people buying or building a new home. The Build Bonus Grant of $20,000 was available for the first 600 eligible applicants until 31 December 2020 and the grant has been extended until 31 March 2021 at a lower amount of $12,000 but the cap on the number of applicants has been lifted.
Have any questions?
If you have any questions or would like further information please contact lawlab on 1800 529 522 or by email email@example.com.
We can hep you determine your eiligibility for grants and stamp duty exemptions so you can buy with the comfort these are available to you.
Unlike most legal and conveyancing businesses whose practices revolve around face to face meetings; the COVID-19 social distancing and lockdown measures will be business-as-usual for lawlab. Lawlab’s friendly legal team will work with you remotely and keep you up to date via our industry leading digital platform Rundl (www.rundl.com) as well as by video conference and telephone.