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HomeBuilder grant: What is it and who is eligible for the $25K

Published on 24th June by iBuyNew

HomeBuilder grant: What is it and who is eligible for the $25K

This article is being updated as new information is announced by the Government and was origially published on ibuildnew.com.au


Australians with grand design dreams who are looking to build a new home or renovate their own are set to receive a $25,000 cash grant as the government looks to keep the construction sector building. The $688 million HomeBuilder Scheme will be granted to people who sign contracts to build or substantially renovate their home from Thursday 4th of June 2020 until the 31st of December 2020.

Prime Minister Scott Morrison said that this scheme will drive a “tradie-led recovery” of the economy and support 140,000 direct construction jobs and a million workers in the wider residential building sector, including, architects, materials supplies, manufacturers and engineers. Mr Morrison said that the $25,000 grants would “support those Australians whose dream it was to build their home or to do a big reno.

“If you’ve been putting off that renovation or new build, the extra $25,000 we’re putting on the table along with record low interest rates means now’s the time to get started.”


Who Is Eligible For The $25,000 HomeBuilder Grant?

How much is the grant?
$25,000

Is the $25,000 HomeBuilder Grant open to everyone, or only first home buyers?
The grant is available for new residential constructions and renovations by owner occupiers, not just first home buyers.

Who is eligible for HomeBuilder?
To access the grant, owner-occupiers must be:

  • 18 years or older

  • An Australian citizen

  • An individual, not a company or trust

  • Individuals must be earning no more than $125,000 based on your 2018-19 tax return or later; or

  • Couples must have a combined income of no more than $200,000 based on both 2018-19 tax returns or later

  • You must enter into a build contract between 4th of June 2020 and 31st December 2020 and; 

  • Build a new home as a principal place of residence, where the property value (house AND land) does not exceed $750,000, or;

  • You are renovating your principal place of residence for an amount between $150,000 and $750,000 and

  • The value of your existing property (house AND land) does not exceed $1.5 million

  • Note - the construction must begin within 3 months of the contract date
     

What is an owner-occupier?
An owner-occupier is the registered proprietor of the land at which they reside (and this property is their principal place of residency). The owner-occupier must also be a natural person (not a company or trust) and must also meet the other eligibility criteria of the program. 

What’s the minimum I have to spend on a renovation to be eligible for the grant?
The minimum amount you have to spend on a renovation is $150,000.

What if a renovation contract includes works that are eligible and ineligible? E.g. the contract covers eligible substantial renovations to the existing dwelling and ineligible landscaping and outdoor works? 
The State or Territory Revenue Office must be satisfied that at least $150,000 worth of renovations is being used to improve the accessibility or safety or liveability of the dwelling.

Will I be eligible to receive the grant if I perform the renovations or building work myself?
If you intend on building or renovating the property yourself, you will NOT be eligible to receive the grant. The work must be done by a registered or licensed builder (relevant to the state or territory where the works will be conducted), not an owner-builder.

Is the grant open to investors and commercial properties?
No, the grant only applies to residential constructions and renovation by owner occupiers - investors and commercial landlords are excluded.

When can I access the grant?
Immediately. HomeBuilder will be available for building contracts that are signed between the 4th of June 2020 and 31st of December 2020.

Who pays me the grant?
HomeBuilder grants will be paid by the relevant State or Territory authority provided the applicant meets the eligibility criteria. 

When will I know if my application is successful?
The relevant state or territory administering agent will notify you of the outcome. 

When can I expect payment of the HomeBuilder Grant to be processed?
Payment of the HomeBuilder Grant depends on whether your application relates to a new build, substantial renovation or off-the plan / new home purchase:

  • A new build – the Grant will be paid after foundations have been laid and the first progress payment has been made to the builder.

  • A substantial renovation – the Grant will be paid after construction has commenced and evidence is submitted showing payments of at least $150,000 of the contract price have been made to the builder.

  • An off-the-plan home/new home contract – the Grant will be paid after evidence is submitted showing that the property has been registered in your name on the certificate of title. You must be registered on the certificate of title as the owner of the property by no later than 31 October 2022.

Please note: In Tasmania, the timing of the grant payment may be different in certain circumstances and you should refer to the State Revenue Office of Tasmania website for further information. 

Will the HomeBuilder Grant be pre-approved?
No, payment of the HomeBuilder Grant will not be pre-approved. For further explanation, please refer to the question above.

How can I apply for HomeBuilder?
You can apply when the State or Territory Government that you are planning to build in signs the National Partnership Agreement with the Commonwealth Government. Further information will become available through your State or Territory revenue office website. 

Here is a list of all State and Territory websites:

VIC, NSW, QLD, SA, WA, TAS, ACT, NT

What documentation will I need to provide?
You will need to provide at a minimum - 

  • Proof of identity

  • Copy of the contract, dated and signed by you and the nominated registered or licensed builder

  • A copy of the builder’s registration or licence

  • A copy of your 2018-19 tax return

  • Documents such as council approvals, building contracts or occupation certificates and evidence of land value

My partner and I jointly own our home. I am an Australian citizen, however, my partner is not. Can I still apply even though the home is jointly owned?
The Scheme is only open to Australian citizens. Eligible owner-occupier(s) must be listed on the property’s certificate of title, and they must meet the eligibility criteria of the program. Permanent residents are not eligible for the Scheme. 

Am I able to apply for a second HomeBuilder Grant for my property as I wish to undertake two substantial renovations on my property?
No. A property is only eligible for one HomeBuilder grant. The eligible applicant can only receive the HomeBuilder grant ONCE.

What happens if there is a change in circumstances and I am no longer eligible for HomeBuilder?
If your circumstances change AFTER you have applied for the grant but have not received the payment, and no longer meet the eligibility criteria, you will need to notify your State or Territory immediately.

How do I prove my taxable income for the HomeBuilder Grant?
Taxable income is shown on your notice of assessment. The notice of assessment is issued by the Australian Taxation Office once your tax return for an income year is processed and this can be used to demonstrate your taxable income.

Please note: Taxable income is your gross income less allowable deductions and represents the amount of income you pay tax on. More information on taxable income can be found at https://www.ato.gov.au/Individuals/Lodging-your-tax-return/In-detail/What-is-income-/#Taxableincome

What if I haven’t lodged a tax return before I apply for HomeBuilder?
If you didn’t earn any income or you earned below the tax-free threshold you may be able to lodge a ‘nil tax return’ or a ‘non-lodgement advice’ to the Australian Taxation Office. Evidence of a nil tax return or non-lodgement advice is appropriate evidence of your income in the relevant financial year. Additional information on requirements for lodging a tax return is available on the Australian Taxation Office website.

Will the tax return have to match the name on the building contract and land title?
Yes, the applicant must be the person(s) who is/are listed on the certificate of title of the property AND the notice of assessment.

What is the definition of a ‘couple’?
This will be determined by the relevant State or Territory authority. Generally, this would include couples in a registered domestic relationship, or those living as a couple on a genuine domestic basis.

Does this grant apply to all property types? 
All dwelling types (house, apartment, house and land package, off-the-plan, etc) are eligible under HomeBuilder, in accordance with the requirement that the owner-occupier must contract to build a new dwelling or substantially renovate their existing property. The applicant must also meet the eligibility requirements outlined above.

Is the HomeBuilder grant tax-exempt?
Yes, the grant is tax-exempt.

Is there a limit to how many people can get the grant?
No. HomeBuilder is an uncapped, time-limited grant.

What renovations will be eligible?

  • The grant will not cover detached structures outside the house such as swimming pools, tennis courts, outdoor spas and saunas, granny flats, standalone garages and shed.

  • The renovation need not involve removal or replacement of foundations, external walls, interior supporting walls, floors, roofs or staircases. The renovation works must improve the accessibility, safety and liveability of the property.

  • No DIY jobs - the work must be done by a registered or licensed builder, not an owner-builder

Are knock-down rebuilds considered “renovations”?
Knock-down rebuilds are considered substantial renovations for the purpose of HomeBuilder.

Is landscaping considered as a substantial renovation?
Substantial renovations are not expected to include renovations that are primarily cosmetic in purpose, such as landscaping. A renovating MUST substantially alter the existing dwelling.

Can this grant be combined with existing State and Federal grants and schemes? For example, the First Home Owners Grant, the First Home Loan Deposit Scheme.
Yes, this grant is offered on top of existing State and Federal building grants, as long as you meet the eligibility criteria.

I already own land but haven’t signed a contract to build a new house – am I still eligible? 
Yes, if you meet the following criteria: 

• If you own a property (house and land), and knock the house down to rebuild – this will be counted as a substantial renovation, and therefore subject to the renovation price range of $150,000 to $750,000 provided the total value (house and land) of the property does not exceed $1.5 million prerenovation;

• If you own vacant land before 4 June 2020, and then build, the total value of the land and new build cannot exceed $750,000; or 

• If you buy the land after the announcement, and then build, the total value of the land and build cannot exceed $750,000.

What if I've already signed a contract to build a new home, can I still get it?
This information is currently not available. We will update once the Government releases more details.

I would like to renovate my investment property - would it be eligible for the HomeBuilder Grant?
No. Investment properties are not eligible for HomeBuilder.

What if I renovate my house and then want to sell? Is there a limit on how long I need to live there?
It is expected that you will continue to live at the property (as your principal place of residence) for at least 6 months. However, this will be confirmed by the relevant state or territory authority, noting that implementation of the HomeBuilder program is currently being considered by States and Territories. 

What if I want to buy an off-the-plan apartment or townhouse?
Off-the-plan apartments or townhouses are eligible for HomeBuilder. 

For contracts to purchase an off-the-plan home/new home, construction can have commenced prior to the date of the sales contract, however not before 4 June 2020. You must also be registered on the certificate of title as the owner of the property by no later than 31 October 2022.

However, if you sign the contract to buy the dwelling after 4 June 2020, and construction on the home commenced before 4 June 2020, then the home does not qualify for HomeBuilder. 

What if I want to buy a recently built home that has never been lived in before? (Eg - spec build)
HomeBuilder is intended to support activity and provide a pipeline of work for the residential construction sector in the second half of 2020. An existing home that has already been completed, or started construction before 4 June, does not qualify for HomeBuilder. 

Further, where construction commences on or after 4 June 2020 and no later than three months after the contract is signed and provided the contract is signed between 4 June and 31 December 2020, then the property purchase may be eligible for HomeBuilder. 

What happens if there are unforeseen delays to start my project?
Construction must commence within 3 months of the contract date. Where commencement is delayed due to unforeseen factors outside the control of the parties to the contract, a maximum extension of an additional 3 months may be provided.

When is construction considered to have commenced?
When construction is considered to have commenced will depend on the type of contract that you enter into:

For new builds, commencement of construction in some jurisdictions will be as early as excavation; in other jurisdictions commencement occurs at the point of laying the slab.

In ACT:

  • In the Australian Capital Territory, commencement of construction means substantial earthworks, excavations, demolition and physical building work. 

In SA:

  • In South Australia, construction is taken to have commenced when site works including excavation for the approved building works to the top of the base level is complete. 

In TAS:

  • In Tasmania, construction is taken to have commenced when laying of the foundation is complete. 

In VIC:

  • For new builds, commencement of construction means the commencement of excavation and site preparation works.

  • For a substantial renovation, commencement of construction is when the works under the renovation contract commence.

  • For an off-the-plan build, commencement of construction means the commencement of excavation and site preparation works.

Other States will provide further guidance shortly. 

Am I eligible for the HomeBuilder Grant if I am building a home in a land lease community?
No. HomeBuilder is not intended for properties where the applicant does not own the property (both dwelling and land).

For further information regarding this grant, click here.

Looking to or buy a new property and take advantage of this scheme?

Now is the perfect time.

 

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