Q.As a first homebuyer, what grants and rebates am I entitled to when deciding to buy a block of land and build?
A.First homebuyers in Western Australia, wishing to purchase land and build, are currently entitled to a $10,000 first home buyers grant administered through the Office of State Revenue. First homebuyers of established properties are entitled to a $3,000 grant. You will be eligible for this grant provided neither you nor your spouse/partner have owned a home previously; have not received any Grant previously; and provided at least one of you is a Australian Citizen/Permanent Resident. General information regarding the FHOG can be obtained at www.osr.wa.gov.au and any specific advice regarding your circumstances should be directed to the Office of State Revenue.
A.First homebuyers in Western Australia are also entitled to a stamp duty rebate on land where the purchase price does not exceed $300,000.
Q.Am I entitled to a stamp duty rebate when I am a first homebuyer but my partner is not?
A.Unfortunately, no. You must both be first home buyers in order to be stamp duty exempt
Q.What rebates are available to first home buyers when purchasing an established home?
A.In addition to the First Home Owners Grant of $3,000 – you may be stamp duty exempt on established houses up to a value of $430,000. In addition, you may be eligible for the REBA grant where the property purchase does not exceed $400,000. Refer to www.reba.wa.gov.au for full terms and conditions.
Q.Can I still apply for a loan if I am on probation?
A.Most banks and lenders prefer that you have completed any probationary period with your employer, however subject to the amount of deposit you have available and whether or not your new job is within the same industry, there may be exceptions to this policy guideline.
Q.Can my deposit be gifted?
A.Most banks and lenders prefer that where only the minimum deposit is being contributed, any gifted funds remain in a bank account held in your name for a minimum period of 3 months before they consider those funds to be genuine savings. However there are some lenders who may consider your gifted deposit when you can demonstrate a strong rental history through a licenced real estate agent, or the deposit is larger than 5% of the purchase price.
Q.I am planning on purchasing a block and building a new home, what fees, charges and other costs are involved?
A.When entering into a land contract, you will be expected to pay an initial deposit which may range from $1,000 to $5,000 depending on the vendor. In addition, the builder will require an initial deposit usually between $1,000 and $3,000 for the Preparation of Plans Agreement. This amount will be used to pay for the survey of the land and an engineers report and for the preparation of plans and is usually non-refundable. Both these deposits will count towards the total deposit you are contributing. In addition to your total deposit, you may have stamp duty costs; and will also have settlement costs which include government fees and other costs which vary depending on the cost of the land and time of the year; there are also lender costs which may include application fees; valuation fees and goverment fees.
The remainder of your deposit is payable at settlement of the land. After settlement of the land you will be charged interest on the portion of the loan that is drawn. This will increase as the construction of your home progresses, and by the time the home is completed you will be paying almost the full loan repayment. Some lenders charge interest only during construction and others will require principal and interest repayments.