Knowing what you can afford to borrow is really important. You may have a home loan, but you still want a life. Make a list of your current and future needs and expenses.

Don’t forget, you never know how your health, income and personal circumstances may change. So just because you may be able to borrow a certain amount of money, it doesn’t mean you should.

It is important to speak to your finance broker or banker prior to making an offer on a property to ensure that you have not overextended yourself, and ideally, to obtain pre-approval with your preferred lender.

It is recommended that you have a deposit of at least 20% of the purchase price of the property. If you have less than this, you may need to pay for lenders mortgage insurance (LMI). Speak to your finance broker or banker for more information about your deposit and LMI.

Transfer Duty

Established Homes (as at 3 July 2014)

To be eligible for the FHOR of duty, the value of the established home must not exceed $530,000.

Where the dutiable value of the home does not exceed $ 430,000, no duty is payable.

Where the dutiable value of the home exceeds $430,000 but does not exceed $530,000, duty is payable at a rate of $19.19 for every $100 or part of $100 by which the dutiable value exceeds $430,000.

Where the dutiable value of the home exceeds $530,000, the FHOR of duty does not apply and the buyer would be liable for the usual Residential Rate.

Vacant Land

To be eligible for the FHOR of duty, the unencumbered value of the vacant land must not exceed $400,000.

Where the dutiable value of the land does not exceed $300,000, no duty is payable.

Where the dutiable value of the land exceeds $300,000 but does not exceed $400,000, duty is payable at a rate of $13.01 for every $100 or part of $100 by which the dutiable value exceeds $300,000.

Where the dutiable value of the vacant land exceeds $530,000, the FHOR of duty does not apply and the buyer would be liable for the usual General or Residential Rate (as applicable).

Note: The dutiable value threshold limits apply to the whole value of the home or vacant land being transferred not to the value of the person’s interest in the property that is being transferred.

For more information about the First Home Owner Rate of Duty, refer to Office of State Revenue.

For first home owners in states other than WA, you should refer to your local Revenue Office for state-specific information:

• ACT Revenue Office
• NSW Office of State Revenue
• Northern Territory Revenue Management
• Queensland Office of State Revenue
• Revenue SA
• Tasmania State Revenue Office
• Victoria State Revenue Office

Foreign Buyers Duty

From 1 January 2019, Foreign Buyers Duty imposes an additional duty of 7% on the dutiable value for purchases involving foreign persons or entities acquiring residential property in Western Australia.

It is important to note that even if you are eligible for the First Home Owner Rate of Duty (i.e. a reduction or exemption from paying transfer duty), you may still be liable for the Foreign Buyers Duty.

If either you or your co-buyer are a foreign person, Foreign Buyers Duty will apply to the foreign person buying the property. For example, if the property is valued at $400,000 and is acquired jointly, there will be no Transfer Duty payable at the First Home Owner Rate but there will be $14,000 ($200,000 x 7%) Foreign Buyers Duty payable.

For more information about the Foreign Buyers Duty, you should refer to your conveyancer or to Office of State Revenue.

Moving Costs

Here are just some of the costs you need to factor in when moving into your first home:

• Removalists
• Cleaners
• Extra furniture
• Utilities connections including Internet/Foxtel
• Strata searches and building and pest inspection costs
• Home & contents insurance
• Renovations or modifications to your new home
• Mail redirection

First Home Owners Grant

The First Home Owners Grant (FHOG) is administered in WA by the Office of State Revenue and provides a one-off payment for eligible applications. There are no income or assets tests to qualify for the FHOG.

First home owners buying or building a new home may apply for a grant of up to $10,000.

The current FHOG applies to new residential dwellings only and does not apply to established homes, business premises, holiday houses or minor renovations to an existing home. Where a first home owner purchases a home that has undergone substantial renovations, they may be eligible to apply. Please refer to our website or contact the Office of State Revenue for more information on substantially renovated homes.

To be eligible for the grant and/or first home owner rate of duty, applicants must satisfy the following criteria:

• An applicant must be a natural person (i.e. not a company) and be 18 years or over at the time of making application. If you are under 18, you may be able to apply for an exemption from the age requirement.
• At least one applicant must be an Australian citizen or a permanent resident at the time of making application.
• Applicants and/or their spouses or de facto partners cannot have:
  • previously received the grant or first home owner rate of duty from any jurisdiction in Australia
  • owned residential property anywhere in Australia before 1 July 2000
  • owned residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence before 1 July 2004
  • owned residential property anywhere in Australia on or after 1 July 2000 and occupied that property as a place of residence for a continuous period of at least six months that began on or after 1 July 2004.
  • Applicants must occupy the home as their principal place of residence for a continuous period of at least six months commencing within 12 months of settlement if purchasing a home, or within 12 months from the date of completion if building a home.
  • Applicants must hold a relevant interest (ownership) in the land on which the home is situated and must own the home in their own capacity. If they own the home as a trustee, it must be held on trust for a person with a legal disability.

For more information about the FHOG and to see whether you are eligible, refer to Office of State Revenue.

Home Buyers Assistance Account

A grant from the Home Buyers Assistance Account (HBAA) reimburses some of the incidental expenses incurred in connection with the purchase of a first home in Western Australia, provided the applicants meet all criteria. Eligible applicants receive a grant of up to $2,000.

The grant can be used to reimburse some incidental expenses including mortgage registration fees, solicitor and/or conveyancing fees, valuation fees, inspection fees, establishment fees, mortgage insurance premiums and lending institution fees associated with the purchase of your first home.

The HBAA Grant is administered by the Department of Mines, Industry Regulation and Safety (DMIRS). For more information, including eligibility criteria and the application form, visit DMIRS’ website.