The development is a major breakthrough in the chilling shooting of WA Rebels boss Nick Martin which rocked Perth three months ago.
The man’s identity can’t be revealed for legal reasons but he is an ex-soldier.
Last December Mr Martin was shot dead at the Kwinana Motorplex in front of family.
Police believe Mr Martin was shot by a sniper, who had set up a kill-shot from more than 300 metres away.
The bullet went straight through the 51-year-old’s chest and into his son-in-law, Ricky Chapman, who was sitting behind him in the stands.
A young boy known to the family was also injured during the shooting.
The shot travelled between 300 and 340 metres to hit its target.
Detectives at the time located flattened grass on the perimeter of the Perth Motorplex where they believe the sniper was positioned.
The home in Waikiki was one of three Perth properties raided yesterday by police.
Nearby bushland was also scoured for clues.