The government has announced the new HomeBuilder scheme to give a boost to the construction industry, which has of course been greatly impacted by COVID-19. Under the scheme, Australians will be offered $25,000 grants to build a new home or start a major renovation.
Here are the 5 things you need to know about the scheme:
1. The grant is a once-off cash payment of $25,000.00.
2. To be eligible:
- your income in the 2018/2019 financial year must have been $125,000 or less, or if you're a couple then your combined income must have been $200,000 or less.
- you must enter into a building contract for either a new home that you intend to owner occupy or for major renovations to your existing primary place of residence.
- the value of the work set out in the building contract must be between $150,000 and $750,000.
- you must enter into the building contract between 4 June and 31 December 2020 and the contract must specify a start date that is within three months of the contract date.
- if you're looking at the renovation option, the value of your house before the renovations must not exceed $1.5 million.
3. HomeBuilder cannot be used for additions to the property that are unconnected to the principal place of residence such as swimming pools, tennis courts, granny flats, outdoor spas and saunas, sheds or detached garages.
4. The scheme does not cancel out the existing first homeowner schemes, meaning that first home buyers can receive multiple benefits of $25,000 from HomeBuilder, $10,000 from the first home grant, and up to $24,700 in stamp duty exemptions, creating a total saving of almost $60,000!
5. In our view, although the scheme is extremely attractive and is open for a limited time only, people should resist the kneejerk reaction to instinctively chase after the grant money and should instead take the time to consider their financial position and reflect on whether investing their savings or borrowing money for the purpose of building or renovating is the best move for them in their particular circumstances.
Flowing on from the scheme, the government is expecting to see at least 25,000 new builds and significant renovations within the next six months.
If you are thinking about being one of the people to take up the offer, please do not hesitate to contact our Property & Commercial team on 1800 650 656 to discuss how the new HomeBuilder scheme might apply to you. Our expert team can help you at every step of the way, from confirming your eligibility to reviewing your building contract. We're here to help!
Aaron Strickland | Solicitor