The Federal Government in Australia has recently announced the $25,000 Homebuilder grant to be paid tax-free to those Australians who are looking to build or renovate their home. This has been announced by the Government with the aim of assisting those impacted by COVID-19, at least in theory, and stimulate the construction sector of the Australian economy. This week we’re addressing some of the frequently asked questions (FAQs) regarding the Homebuilder scheme.
What is the eligibility criteria for the Homebuilder scheme?
- Firstly, the applicant who is either buying or substantially renovating the property must be the owner-occupier.
- The applicant must be a natural person.
- The applicant must be an Australian citizen
- The applicant must be 18 years or older.
- The income cap requirements also must be met, which are as follows:
- An individual applicant must have earned no more than $125,000 for the 2018-19 financial year
- A couple must have earned no more than $200,000 for the 2018-19 financial year
- The construction contract must be entered into between 4th June 2020 and 31st December 2020.
- Further, the construction contract must be for one of the following:
- Construction must be for a new principal place of residence where the value of the house and land does not exceed $750,000
- The renovation must be substantial with a contract value of between $150,000 – $750,000 and the property value must not exceed $1.5M in this case.
- Finally, construction must commence within 3 months of the contract date.
Can property investors access the Homebuilder scheme?
No, the property must be used for the purpose of being the principal place of residence.
Do I need to be a first home buyer to access this grant?
What documents will I require to access the Homebuilder grant?
The following will be required as a minimum to access the grant:
- Proof of your ID
- A signed copy of the construction or renovation contract
- A copy of the builder’s registration / license
- A copy of your 2018-19 tax return to support the income cap requirements
- Evidence of land value and other council documents as required
Is there a limited quantity of grants available?
No, there is no limit to the quantity of Homebuilder grants that will be available. There is however the time restrictions outlined above.
Can I use the Homebuilder grant to hire a relative to complete the construction work?
No, the Australian Government has highlighted that any construction contract must be entered into ‘at arm’s length’ and must not be intended to benefit a specific relationship. It’s also important to note that the contract price must be competitive and a fair market price.
When can I access the Homebuilder grant?
This will be up to each of the individual states and territories as they will be processing the Homebuilder grants.
Can I use the Homebuilder grant as part of my home deposit?
Yes, it is very likely that this will be possible, however we are currently awaiting updates from the various lenders. Some have already advised that the grant will be able to be used as part of your home deposit, which is great news for many, bringing their first or next home much closer to reality. If you’d like to explore which lenders will accept the grant as part of your deposit, reach out to our team for an obligation-free discussion.
If you have any other questions that we’ve not covered about the Homebuilder grant, please reach out and let us know.
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