The new $25,000 HomeBuilder grant has been revealed to the relief of aspiring home owners and struggling tradies across Australia.
HomeBuilder is a scheme designed to help residential construction businesses bounce back from the financial effects of COVID-19. It provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home.
Fast facts:
- HomeBuilder is time-limited
- HomeBuilder only applies to Owner Occupied properties
- Amount = $25,000
- First home buyers are eligible in addition to non-first home buyers.
- Contract must be signed between 4th June 2020 and 31st December 2020
- Construction must commence within three months of the contract date.
- HomeBuilder will complement existing State and Territory First Home Owner Grant programs, stamp duty concessions and other grant schemes, as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.
Eligibility :
To access HomeBuilder, owner-occupiers must meet the following eligibility criteria:
- you are a natural person (not a company or trust);
- you are aged 18 years or older;
- you are an Australian citizen;
- you earn no more than $125,000 per annum based on your 2018-2019 tax return or later (individual applicant); or you and your partner collectively earn no more than $200,000 per annum based on both your 2018-2019 tax returns or later;
- you enter into a building contract between 4th June 2020 and 31st December 2020 for the purposes of; build a new home as a principal place of residence where; Property value does not exceed $750,000 (including land value); or you substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property does not exceed $1.5 million (including land value);
- construction must commence within three months of the contract date.
The tax-free grant will apply to all owner-occupiers – not just first home buyers.
All dwelling types (house, apartment, house and land package, off the plan, etc) will be eligible under the HomeBuilder scheme.
The scheme will not apply to owner-builders or those who are planning to build a new home or renovate an existing home as an investment property.
The grant also cannot be used for additions to the property that are not connected to the home, such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages.
The program will be uncapped but the government expects it will cost $680 million, which roughly equates to around 27,000 grants.
Process and timing
HomeBuilder will utilise existing state and territory mechanisms to distribute the HomeBuilder payments. When the States and Territories begin accepting HomeBuilder applications, they will backdate acceptance of these applications to 4 June 2020.
Case Examples
First home buyers Emma and Liam
They decide to purchase a house and land package. Emma and Liam enter into a house and land contract for $550,000 on 25 September 2020. Emma and Liam’s bank applies on the couple’s behalf to the relevant State or Territory revenue office to receive the HomeBuilder $25,000 grant. The revenue office conducts the eligibility checks and reviews the couple’s documentation and confirms that both Emma and Liam are Australian citizens, over the age of 18, have a combined taxable income under $200,000 based on their 2018-19 tax return and the value of the contract is under the $750,000 contract price cap. As the couple are both first home buyers, Emma and Liam may also be entitled to their State’s First Home Owner Grant and stamp duty concessions as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.
Owner-occupier Cassidy
She decides to substantially renovate her home. Cassidy enters into a contract to substantially renovate her home on 31 December 2020, with renovations valued at $400,000. The value of her home is $900,000 (this includes the value of the house and the land). Cassidy pays the builder $10,000 to commence renovation of her home on 2 February 2021. Cassidy then applies directly to her State or Territory revenue office to receive the $25,000 HomeBuilder grant. The revenue office conducts the eligibility checks and confirms that Cassidy owns the property, is an Australian citizen, over the age of 18, and has a taxable income under $125,000 based on her 2019-20 tax return. The revenue office also confirms the value of the renovations is between $150,000 and $750,000, and the value of her home is less than $1.5 million and Cassidy has made the first progress payment on the renovations. The revenue office approves the application. As Cassidy already owns her own home, she is not eligible for the First Home Owner Grant, the First Home Loan Deposit Scheme or the First Home Super Saver Scheme.
How we can help
At Finance Mutual Australia, we are experts in finance. We provide our clients with a vast array of lenders to choose from when taking out a loan. This power of choice is also leveraged to negotiate better interest rates and loan terms for out clients. We pride ourselves in our work, and are more than happy to do all of the leg work on your application, ensuring that the process is quick and simple for our clients.