The Federal Government formally announced the HomeBuilder scheme today whereby it will provide (via the relevant State & Territory bodies) non-taxable grants of $25,000 to eligible owner-occupiers to build a new home or substantially renovate an existing home.
The following persons are eligible for the HomeBuilder Grant:
- Natural person (not a company or trust);
- Over 18 years of age;
- Australian citizen (this would exclude permanent residents, NZ citizens living in Australia and other visa holders); and
- Meet one of the following income caps:
- individual applicant – $125,000 per your FY19 (or later) income tax return;
- couple - $200,000 per both of your FY19 (or later) income tax returns.
For individuals/couples who may be over the above income caps in FY19 but may fall under them in FY20 (e.g., income reduction due to COVID-19), submitting their FY20 income tax returns as soon as possible after 1 July 2020 is recommended.
The following expenditure is eligible for the HomeBuilder Grant:
- Building contract entered into between 4 June 2020 – 31 December 2020;
- build a new home as a principal place of residence where the property value (house and land) does not exceed $750,000; or
- substantially renovate an existing principal place of residence where the renovation contract is between $150,000 - $750,000 and the value of the existing property (house and land) is less than $1,500,000; and
- Construction must commence within 3 months of contact date.
In relation to renovations, they must be completed by an arm’s length licenced or registered builder (i.e., it is not available for DIY renovations). The renovations must improve the accessibility, livability and safety of the property. Renovations such as building tennis courts, pools, outdoor spas/saunas and garages/sheds unconnected to the property are excluded.
For those who already own a property (house & land) and wish to knock-down the house and rebuild, the substantial renovation thresholds above will apply. For those who own vacant land either before or after 4 June 2020 and then build, the new build thresholds above will apply.
While applicants need not be first home buyers, the scheme isn’t available for the construction or renovation of investment properties or for owner-builders.
The scheme is uncapped but is expected to cost $680m. It will be administered by the relevant authority in each State and Territory on behalf of the Federal Government. This grant will be in addition to any existing first home owner grant provided by State and Territory Governments.
Thinking of applying? Make sure you are getting the best rate for your finance.
With interest rates at historical lows, if you are thinking of taking advantage of the homebuilder scheme now is the perfect time to look at refinancing.At Prosperity we offer a full lending suite of services. Our lending advisers have a wealth of knowledge, access to over 40 banks and lenders, daily rate updates and campaigns that are not advertised in the mainstream.
There is significant data to illustrate that the longer you stay with your bank, the greater the chance that your interest rate will be set higher than what that that same lender would charge for new business. In essence, this means your loyalty is penalised. In fact your bank relies on you not checking your home loan rate. Remember we have had five historical rate decreases in the past 12 months - did your bank pass on all five full rate cuts?
At Prosperity, we work with you to determine your finance options via an obligation free Finance Health check. This ensures you’re getting a deal that works for your individual circumstances, that is market leading and is competitively priced. For more information please call Matthew Guy or Nicole Taylor on 1300 795 515.