New HomeBuilder stimulus announced today
HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home. HomeBuilder will assist the residential construction market by encouraging the commencement of new home builds and renovations this year.
HomeBuilder is a time-limited grant program to help the residential construction market to bounce back from the Coronavirus crisis.HomeBuilder will provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020. Construction must commence within three months of the contract date.
The value of a home renovation project must be over $150,000 and up to a maximum of $750,000. The existing home must have a pre-construction valuation that confirms the improved value of the property before work commences is less than $1.5 million.
Renovation projects must be connected to the use of the home as a principal place of residence, e.g. pools, sheds, garages, and the like are excluded.
Renovation projects will need to improve the accessibility, safety and liveability of the dwelling. At this stage, no more details are available on what this may mean.
The builder must demonstrate that the contract price for the new build or substantial renovation is equivalent to the cost of comparable building work on 1 July 2019.
The big winner from this are those considering knocking down their existing home and re-building as the example case study shows.
"Owner occupiers Jacqui and Henry decide to knock down and rebuild their existing home
Jacqui and Henry enter into a building contract to knockdown and rebuild their existing home on 24 August 2020, with the knockdown and rebuild contract valued at $400,000. The value of the property is $800,000 (including the current value of the dwelling and land). The couple pay the builder $15,000 to commence the knockdown and rebuild on 14 September. Jacqui and Henry’s bank applies on the couple’s behalf to the relevant State or Territory revenue office to receive the HomeBuilder $25,000 grant.
The revenue office conducts the eligibility checks and confirms that the couple own the property, are Australian citizens, over the age of 18, have a combined taxable income under $200,000 based on their 2018-19 tax return, and the value of their existing home and land pre-renovation is less than $1.5 million. The building contract is also within the HomeBuilder renovations price range (between $150,000 and $750,000) and the couple have made the first progress payment on the renovations. The revenue office approves the application.
As Jacqui and Henry already own their own home, they are not eligible for the First Home Owner Grant, the First Home Loan Deposit Scheme or the First Home Super Saver Scheme"
However those choosing to build on vacant land are restricted to a total value of $750,000 including the land.
NHBB can advise you on how to get the most out of this scheme by providing expert advice along with design and cost comparisons.
Talk to us before you talk to a builder.
About the Author
Tristan Kirkham | Managing Director
Tristan has managed some of Australia’s major building companies, both project and private. His committment to customer service and providing market leading communication product for the home building industry has led to a role as regular Judge in the HIA Green Smart, HIA Kitchen & Bathroom Awards and the major Housing Awards. Winning multiple awards throughout his career in the housing industry, he is dedicated to improving the industry standards and practices. Tristan's vision is to provide a better way to build homes for all parties.