It's raining money....

Written on the 4 June 2020 by Nathan Drew, Fox Finance Group

Government to hand out $25k grants for housing construction, renovations to bolster industry

I'm sure that the latest announcement from the Australian Government yesterday around their new HomeBuilder package has already started to create a lot of excitement for everyone considering a new purchase in the property market. (Buyers, Builders and Real Estate Agents alike)

$25K HomeBuilder Grant Is Available Now

The new Federal Government stimulus is designed to breathe life into the residential property market, which many believe were facing a prolonged downturn off the back of the COVID-19 crisis.

We are sure that this stimulus has been welcomed by the property industry, which has been calling for fiscal support for some time now. This could be exactly what the industry needs to get the motivated buyers back out to the display villages again.

The Australian Government estimates that approximately 27,000 grants will be handed out as part of the package across $10 billion in building projects and would support 368,000 small builders and tradies.

Here are some key points of the government announcement:

Newly released Federal Government HomeBuilder grant is $25,000
Available for new home builds valued at $750,000 or under
Income test: singles earning under $125,000 pa, and couples under $200,000 pa
Available on contracts signed between 4 June 2020 and 31 December 2020
Also available for renovations $150,000 and over, on property valued at under $1.5M (pools are exempt from this)

We are your experts in all things Home Finance and Government Grants, so feel free to reach out to us with any questions you may have around this.

What does that mean for you?

As a first home buyer or owner-occupier, understanding what federal grants, incentives and discounts that are available to you can be a nightmare. We've cut through the headlines and jargon and created a snapshot of the HomeBuilder Grant. Here's everything you need to know.

What is the HomeBuilder Grant?

$25,000 grant to build a new home or start a major renovation
Available to eligible first home buyers and owner-occupiers
Must be entering into building contract between 4 June 2020 and 31 December 2020
Construction must be with a licensed builder, and start within 3-months of the contract date
Available to anybody who successfully applies

Who's eligible?

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 meet one of the following two income caps:

1) $125,000 per annum for an individual applicant based on your 2018-19 tax return or later;
2) or $200,000 per annum for a couple based on both 2018-19 tax returns or later;

you enter into a building contract between 4 June 2020 and 31 December 2020 to either:

1) build a new home as a principal place of residence, where the property value does not exceed $750,000; or
2) 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;

construction must commence within three months of the contract date.

What's considered a 'renovation'?

If you are thinking about a renovation, to receive HomeBuilder the works must improve the accessibility, safety and liveability of the dwelling.

Additions to the property such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages aren't allowed (unconnected to the property).

What does a Licensed Builder mean?

Renovations or building work must be undertaken by a registered or licenced building service 'contractor' (depending on the state or territory you live in) and named as a builder on the building licence or permit.

How can we help?

If you're thinking of a applying for a construction loan, we can discuss how this works and how to proceed.

If you're a first home buyer there's lots working in your favour! The HomeBuilder Grant works with the existing grants available (stamp duty concessions, state and territory First Home Buyer Grants, along with the national Commonwealth First Home Loan Deposit Scheme and First Home Super Saver Scheme).

It's worth a conversation so we can run the numbers for you.

Extra Great News For First Home Owners

If they qualify, First Home Owners can now access the $25,000 Home Buyers grant (Federal) and the $15,000 First Home-Owners grant (QLD Govt.) on new property, as well as the First Home Loan Deposit Scheme FHLDS (more being released 1 July 2020).