Australia’s Detached Home Boom Continues to Rise Higher Than Ever
The country now has the highest number of detached homes currently under…
12 June 2020
First-home buyers in all states of Australia already had cash incentives to build or buy a new home but last week the stakes got substantially higher.
When the federal government revealed its $25,000 HomeBuilder grant in a bid to boost the economy, throwing a lifeline to the home construction industry, it wasnâ€™t designed to be used in isolation.
That $25,000 can be accessed on top of any existing grants or exemptions and, while these differ state by state, these grants could be a game-changer, says Damien Ross, general sales manager at QM Properties.
â€œFor some first-home buyers, this will be their only opportunity to get into the market. Saving this kind of money takes most people years,â€ he said.
On Sunday arrived the news that first-home buyers in Western Australia could receive $55,000 in government assistance if they build a new home, thanks to a bonus $20,000 that the state government is going to contribute on top of HomeBuilder.
Those in Queensland and South Australia can claim $40,000, Northern Territorians can get up to a whopping $55,000 and Tasmanians $45,000.
In Victoria, first-home buyers can access at least $35,000, and up to $45,000 if theyâ€™re building a new home in a regional area.
Unfortunately, first-home buyers in the ACT and NSW â€” and especially those located in Sydney with its $1.16 million median house price â€” will get the least amount of help.
First-home buyers in the ACT can get up to $32,500, while those in NSW can get up to $35,000.
â€œThe grant will definitely provide some boost to the construction industry but there are a lot of restrictions and in some cases, theyâ€™ll mean itâ€™s just too hard (to access),â€ said Domain economist Trent Wiltshire.
But for first-home buyers in those states with bigger grants available and moreover, lower property prices, the grants would make a huge difference, Mr Ross said, noting that in some cases the funds would cover over 10 per cent of their deposit.
â€œWeâ€™re doing house-and-land packages in that sweet spot between $350,000 to $400,000 and $40,000 in grants covers more than 10 per cent,â€ he said.
â€œThis is the best opportunity Iâ€™ve seen since being in land development and will mean the difference between getting a house or not getting a house for a lot of young people.â€
NSW â€“ $35,000
On top of the new HomeBuilder grant of $25,000, NSW first-home buyers already have access to a $10,000 grant for new properties costing less than $600,000 and owner-builder/building contracts worth less than $700,000.
If youâ€™re purchasing land to build a new home, the total price â€“ including the land and home â€“ must not exceed $750,000.
There is also no stamp duty payable on property under $650,000, or vacant land under $350,000, while properties between $650,000 to $800,000, or vacant land between $350,000 to $450,000 get discounted stamp duty.
Thatâ€™s a saving of up to $24,740 on a $650,000 home.
Victoria â€“ up to $45,000
Victorians already had a $10,000 grant available for new first homes, and $20,000 for new homes built in regional areas, valued at $750,000 or less. They also donâ€™t pay stamp duty on property under $600,000, with discounted stamp duty applying on property between $600,000 to $750,000.
Thatâ€™s a saving of up to $31,070 for a home valued at $600,000.
First-home buyers building or purchasing a property in regional Victoria can claim $45,000, while those buying closer into Melbourne will receive $35,000.
Queensland â€“ $40,000
Queensland first-home buyers already got $15,000 towards buying or building a new house, unit or townhouse valued at less than $750,000. With the federal governmentâ€™s HomeBuilder scheme, that will take the total available to claim to $40,000.
Queenslanders also donâ€™t pay transfer (stamp) duty on homes costing less than $500,000, and a discounted rate up to $550,000. That translates to a saving of $15,925 on a home under $550,000.
Western Australia â€“ $55,000
First-home buyers in Western Australia already had access to $10,000 to put towards the cost of building or buying a new home, but the past week has seen their incentives go next level.
On Sunday the state government announced it would give home buyers a bonus $20,000 for new residential builds on top of the $25,000 already offered by the HomeBuilder scheme.
For first-home buyers, that takes the total cash pool to $55,000 â€“ and thatâ€™s before the stamp duty concessions.
Based on a purchase of $430,000, a first-home buyer would save $14,440 in stamp duty.
ACT â€“ $32,500
ACT first-home buyers had $7000 available to them before the federal government announced its $25,000 incentive.
All ACT first-home buyers are eligible for no stamp duty under a new concession scheme which applies to new and established homes as well as vacant land, and at any price, as long as the buyer earns less than $160,000.
Tasmania â€“ $45,000
Tasmanian first-home buyers were already eligible for a $20,000 grant from their state government. This applied to any new property, of any value.
Tasmania provides a 50 per cent stamp duty discount on properties below 400,000, which equals a saving of nearly $7000.
South Australia â€“ $40,000
A grant of $15,000 is already available for new properties valued at less than $575,000, so the HomeBuilder grant will take the total for South Australian first-home buyers to $40,000.
All first-home buyers pay some stamp duty in South Australia, although there is an off-the-plan stamp duty concession available of up to $21,330 on properties under $500,000.
Northern Territory â€“ up to $55,000
Multiple grants are available in the NT, as outlined on the Homeowners Assistance web page, but they include a $10,000 grant for first-home buyers, as well as a BuildBonus grant of $20,000.
Any homeowner is eligible for BuildBonus but it is limited to the first 600 applications.
There is also a discount on stamp duty that could get first-home buyers up to $18,601 off the cost of stamp duty, as well as a scheme that gives them up to $2000 towards the cost of household goods.
Not including the stamp duty exemptions or the household goods grant, first-home buyers in the NT could get up to $55,000 in cash incentives once the new HomeBuilder grant is factored in.