THOSE struggling to buy their first home have been given an extra boost with the WA Government increasing the First Home Owner Grant as well as Keystart lending criteria.
The grant has increase by $5000 up from $10,000 and will take effect from January 1, 2017 for 12 months.
The metropolitan income limit for Keystart loans has been increased by $20,000 and will also come into effect in the New Year.
The lending criteria for loans was tightened in the 2014-15 Budget to help pay Government’s debt but the Barnett Government claims the “recent success” of selling off part of Keystart’s 1.35 billion loan book has allowed it to broaden its criteria.
WA Premier Colin Barnett says both measures will not only help struggling first homebuyers enter the market but also stimulate the construction sector and create more jobs.
“We are conscious about housing affordability and this boost will provide more families an opportunity to get into the housing market,” Mr Barnett said. “We are committed to creating and supporting jobs for West Australians, so this carefully targeted measure will not only provide more employment opportunities for every tradie in your neighbourhood, but we expect an extra 650 WA first homebuyers to buy or build a new home.”
Treasurer Mike Nahan said the 12-month boost to the grant, coupled with the existing transfer duty assistance provided to first homebuyers, was one of many measures the Barnett Government was introducing to support the State’s economy.
First homebuyers who purchase vacant land to build their home on will continue to pay no duty on purchases up to $300,000, and pay a reduced amount of duty on land up to $400,000, Dr Nahan said.
“Those buying an established home or a newly constructed home also pay no duty for homes up to $430,000, and reduced transfer duty on homes up to $530,000″ he added.
Finance and Small Business Minister Sean L’Estrange said the new $5,000 boost payment would apply to contracts entered into between January 1, 2017 and December 31, 2017 for the purchase or construction of a new home, as well as owner builders who lay foundations of their home between those dates.
He said homes must be completed within certain timeframes. Construction must start within 26 weeks from signing the building contract and be finished within 18 months.
Those buying a new ‘off-the-plan’ home, including apartments, will need to make sure construction is completed by June 30, 2019, he added.
As with the existing grant, the boost will also apply to new homes up to the value of $750,000 (or up to $1 million if the home is located north of Shark Bay).
Under the changes, Keystart’s metropolitan income limits will rise up to $20,000:
Singles – up to $90,000, previously $70,000
Couples – up to $115,000, previously $95,000
Families – up to $135,000, previously $115,000
Changes also mean property price cap in the Pilbara and Kimberley will rise from $500,000 to $650,000 for Keystart borrowers.