04 Jul Understanding The HomeBuilder Initiative
The HomeBuilder is a program initiated by the Federal Government to help stimulate the residential construction sector as it contends with the economic impacts of COVID-19.
To be eligible for Homebuilder, you need to be an owner-occupier who is building or renovating homes and meet the following criteria:
- You are an Australian citizen aged 18 or over, you can’t access it through a company or trust.
- Your annual income needs to be less than $25,000 for individual applicants or less than $200,000 for a couple based on your 2018-19 tax returns or later.
If you do not meet the above criteria, the scheme is not for you.
To apply for the HomeBuilder, you must also meet the following criteria:
- You are building a new home as a principal of residence, where the property value does not exceed $750,000 or
- You are substantially renovating 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 (house and land) does not exceed $1.5 million (pre-renovation)
- The contract must be signed between 4 June 2020 and 31 December 2020 and construction must commence within three months of the contract date.
- Your building/renovation is not for investment purposes.
- Your building/renovation is not for companies and trusts who own residential property
There are a lot of criteria involved with this scheme and it is important you get the right advice from your financial planner, mortgage broker and/or builder.
More on Renovations
For those considering renovations, the following rules also apply:
- You must use a licensed builder (no DIY).
- No grants will be given for property additions that are not connected to the main residence, for example, pools, sheds, granny flats, outdoor spas and saunas, tennis courts, or garages are ineligible.
In simple terms, it needs to be a massive renovation in order to be eligible for the scheme.
Can I use the Homebuilder with other grants?
The HomeBuilder grant can be used in conjunction with other federal and state grants such as the First Home Owners Grant and the First Home Loan Deposit Scheme. State grants, exemptions and incentives can also be used in conjunction with the Homebuilder program.
You will need to check with your lender or broker regarding the timing of payments as the Homebuilder may not be able to be used as part of settlement way (in the way that the First Home Owners’ Grant can be).
Can I use the HomeBuilder as part of my deposit?
Currently, it looks unlikely that you will be able to use HomeBuilder towards your initial deposit, primarily because we don’t yet know when the HomeBuilder will be paid.
The relevant State or Territory revenue office will distribute the $25,000 grant directly to the applicant but there is no clear guidance on the timing of this payment yet – so for now, it won’t help with your deposit.
How To Apply
You will be able to apply for Home Builder via the relevant State or Territory Government that you live in, or plan to live in Please note, all states and territories are now signatories to the Home Builder National Partnership so this grant is available Australia-wide. Please refer to the relevant State and Territory websites below:
If this is a topic that you would like to discuss in more detail, please go to www.MasterYourMoneyNow.com.au/getstarted to book in your complimentary 30-minute strategy session.
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Disclaimer: This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs. Past performance does not guarantee future returns.
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