Home Builder Grant for SA
13 September 2020
On 4 June 2020, the Australian Government announced HomeBuilder to provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home, substantially renovate an existing home or buy an off-the-plan home/new home.
We can all agree that no one could have predicted the year 2020 has been, so far. However there has been some exciting news for the construction industry. It is in light of the reported contract cancellation rates of more than 30% since the shutdown of key parts of the economy to prevent the spread of the COVID-19 virus.
In an interview with ABC News Breakfast, Treasurer Josh Frydenberg said the package is intended to create more trade jobs and provide a much needed stimulus for the economy.
Until 31 December 2020, HomeBuilder will provide all eligible owner-occupiers with a grant of $25,000 to build a new home or substantially renovate an existing home. Construction must be contracted to commence within three months of the contract date. The program is expected to provide around 27,000 grants at a total cost of around $680 million.
What do you need to do to access HomeBuilder?
Owner-occupiers must meet the following eligibility criteria:
- you are a natural person (not a company or trust);
- you are aged 18 years or older;
- you are an Australian citizen;
- you meet one of the following two income caps:
- $125,000 per annum for an individual applicant based on your 2018-19 tax return or later; or
- $200,000 per annum for a couple based on both 2018-19 tax returns or later;
- you enter into a building contract between 4 June 2020 and 31 December 2020 to either:
- 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 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;
- construction must commence within three months of the contract date.
Whilst this is aimed at a kickstarter for the construction industry, it is also an exciting time for individuals and/or families to make a start on renovations that may have been on the backburner.
The following eligibility scenario is adapted from the Australian Government’s HomeBuilder Fact Sheet.
E.g, New Home Build
Carla and Andrew decide to build a new home on a vacant block of land that they already own. The value of the vacant block is $400,000 and the building contract that Carla and Andrew sign is for $300,000. Carla and Andrew enter into the building contract on 4 July 2020 and make the first progress payment when construction commences on 2 August 2020.
The State that Carla and Andrew live in signs the HomeBuilder National Partnership Agreement on 23 August 2020 and starts to receive HomeBuilder applications through the revenue office on 27 August.
Carla and Andrew apply for HomeBuilder via the relevant revenue office which conducts the eligibility checks and confirms that both Carla and Andrew are Australian citizens, over the age of 18, have a taxable income under $200,000 based on their 2018-19 tax returns, the value of the property (house and land) is less than $750,000, the contract was signed on or after 4 June 2020 and before 31 December 2020, and they have made the first progress payment. The revenue office approves the application.
As Carla and Andrew are not first home buyers, they are not eligible for the First Home Owner Grant, the First Home Loan Deposit Scheme or the First Home Super Saver Scheme.
Some people gave it a big thumbs up -
Sally R: "We had shelved plans for a $300k major renovation due to COVID-19 uncertainty, but this grant is incentive to reignite the process. Plans already approved, so we're good to go!"
Robbie F: "This is awesome. We have a block where we want to build. This will allow us to get the more done which we were putting off. This will help the tradies out so much."
(courtesy of https://www.abc.net.au/)
On the flip side, some property owners will find it impossible to come up with the additional $150,000, feeling that it is out of reach for many Australians planning renovations that don't meet the criteria.
So, what can you get for a $150,000 renovation?
It would be between a 50sqm and 100sqm extension, depending on whether it was ground level or an extension upwards. That could be a new living area and 2-3 new bedrooms. A $150,000 budget would go a long way towards updating your home's interior. You could renovate your kitchen, a couple of bathrooms and laundry. Depending on your choice of finishings, you could also consider new flooring, painting and even some remodelling to reconfigure your spaces.
The renovation must be “to improve the accessibility, safety and liveability” of the home. It can include a combination of work, such as a kitchen and bathroom renovation. It can’t be for unconnected additions, such as detached sheds or garages, or for swimming pools, tennis courts or outdoor spas and saunas.
It must also be under the supervision of a registered or licensed builder. Creaser Constructions can transform homes and properties into beautiful and practical spaces. You’ll be surprised how we can create a new look to any part of your property. You may be thinking about redesigning a pre-existing layout, or extending your home for an extra living space, bedroom, or en suite. Bathroom and kitchen renovations can add significant value to your home.
What proof or documents will I need to provide when I apply?
- Proof of identity
- A copy of the contract dated and signed by the applicant and the nominated registered/licensed builder
- A copy of your builder’s registration or license, depending on state or territory
- A copy of your 2018-2019 tax return or later to illustrate your income eligibility (and your partner’s)
- Documents such as council development approvals, building contracts, occupation certificates and evidence of land value
If you’re ready to take advantage of the HomeBuilder scheme, please get in touch. We are here, ready to help.
Application Form: RevenueSA guidance on the HomeBuilder grants are available here.
The application form for client/s to complete is available here.