With the current state and federal grants, there is no lack of incentive to build a home and most builders are experiencing considerable demand. However, it is important to be mindful of the timeframes associated with the stimulus to ensure you remain eligible for the extra cash.
The main caveat to receiving the federal $25,000 HomeBuilder stimulus and state $20,000 Building Bonus grant is your building contract needs to be signed by December 31 this year. From there, construction must begin within three months and six months for the federal and state grants respectively.
Speaking to New Homes, Milford Homes Buildings and Design Service Manager Peter Harding said clients needed to be aware of the time lengths involved before committing pen to paper too early.
“The normal process for any builder should be to do the design and pricing works and everything to do with the site, such as inspections, soil testing and the like,” he said.
“But depending on how each builder’s set up, some might get to a certain point and then get clients to sign a building contract before they’ve got what’s called development approval. Council can take anywhere from as little as a month to as much as three or four months to issue a development approval.”
Mr Harding said if a contract was signed before development approval was obtained, the extra time costs could mean missing out on the money.
“From a choosing-a-builder perspective, make sure to ask questions – how long does it takes to prepare drawings and a fixed contract price? At what point do you sign a building contract? And, after that building contract is signed, how long to commence works onsite?”, he said.
“A lot of people may rush into signing a contract not understanding the full process.”
Mr Harding said he had encountered a few misconceptions towards the grants, including different eligibility requirements.
“What I’m finding is some people have come in and thought that they can’t get the state grant because the federal one is means-tested,” he said.
“And then some people are thinking the reverse of it – because they get the state grant, they also get the federal once. So it’s just making sure they go in with their eyes open, knowing what they have access to.”
Being means-tested on income, the federal $25,000 HomeBuilder stimulus is only available to singles earning no more than $125,000 per annum, and couples earning no more than $200,000 per annum. The property and house value cannot exceed $750,000 and must be your main residence.
Meanwhile, the $20,000 State Government Building Bonus is available to anyone building with a registered builder.
If it is your first home, you may also be eligible for the First Homeowner Grand for an additional $10,000.
Mr Harding said it was all about determining what your builder could achieve to not miss out on the grants, adding that Milford Homes would always commence construction within two months of the contract signing date.
“We make sure clients know exactly what their plans are, they’re happy with them and know exactly what their contract price is going to be,” he said.
“We draft up contracts, so clients know exactly what their contract will look like, but we don’t get them to sign until we’ve lodged to council and received development approval because we know we’re going to state onsite within eight weeks from building permit.”
Article published in The West Australian, words by Ben Ashley.