The COVID-19 pandemic has profoundly affected many industries and the economy itself. But the Federal Government has announced various schemes and initiatives as an aid to both businesses and individuals. The most recent one is the HomeBuilder stimulus package. If eligible, you can receive a grant amounting to $25,000. You can use this money to fund for building a new house or renovating your existing home.
What is The HomeBuilder Grant All About?
The HomeBuilder scheme is a tax-free grant from the Federal Government. It is exclusively for owner-occupiers, as well as owners that are planning to build or renovate their houses. The main requirement though is that these people should have an income that falls within a particular tax bracket.
There are a few other conditions that the applicant must meet. For instance, Australian citizenship is a huge requirement, which is often the case with most programs of the Federal Government. The applicant should be planning to build a home, which should not exceed $750,000.
Meanwhile, if you want to claim the funds for your renovation, the upcoming project should cost you around $150,000 to $750,000. Also, your home that is up for remodelling should not be valued at more than $1.5 million.
Are You Eligible?
The HomeBuilder scheme has a broad scope, which makes it a great program to take advantage of. Whether you are planning to renovate or build, you can benefit from it – as long as you are eligible.
The good news is that the requirements are not entirely as limiting as other programs. For one, all types of dwelling are qualified. However, if you have an investment property and you are an owner-builder, not an owner-occupier, you cannot apply for the grant. Also, you should not forget about the value of the house or the renovating project.
The HomeBuilder scheme is available for everyone who meets the criteria mentioned. There are more requirements, which will be discussed later. However, if you are interested, be aware that this program only runs from 4 June 2020 to 31 December 2020. During this time, you should already enter a building contract signed between the mentioned dates. Plus, the renovation or construction project should begin right away or within three months after you signed.
According to the Treasury, the Government’s forecast showed an underperformance in new dwelling construction. For the second half of the year, there is a 60,000 deficit in the building of new homes, which is quite an alarming number. The real estate industry has been doing so well, but the situation worsened with the lockdowns.
The HomeBuilder grant was created to help boost the housing construction market. With the residential building industry experiencing a downturn, it needs all the assistance it can get. The program is believed to help increase the momentum of the sector. At the same time, it will aid in sustaining the workforce right after the pandemic restrictions slowly loosened up.
Prime Minister Scott Morrison confirmed that this grant intends to encourage people to invest in real estate in the country. It will help the industry while Australians receive the help they need to build the home of their dreams.
When successful, HomeBuilder will create more jobs throughout the country. It can support more than one million workers, including painters, plumbers, electricians, and of course, builders.
Before you apply, be sure that you understand the specific requirements of the scheme, including:
- The critical condition is with regards to the construction price of the house. If you plan to build a new home, it should be between $150,000 and $750,000.
- You should also take note of the time limit associated with the eligibility process. Therefore, even if you do have plans and you have already entered a contract with the builder, you should begin construction within the next nine months.
- There are also income limits, such as earning no more than $125,000 yearly.
- For couples that want to apply, they should not earn more than $200,000.
- Knockdown rebuilds are considered substantial renovation. Therefore, they fit the requirement. However, there is a $750,000 cap on the value of the project. Homeowners and builders should also understand that the entire renovation, as well as the land value, should not be more than $1.5 million prior to the remodel.
- While remodelling projects are funded, outdoor improvements do not count. Therefore, you cannot use the grant for outdoor spas, saunas, swimming pools, and sheds.
If you meet the requirements above, you can become one of those that can use the funds for building or renovating their property.
How to Benefit from the HomeBuilder Scheme
Thousands of homeowners are rushing to claim the grant. Aside from driving economic activity, it is, without question, beneficial to owner-occupiers.
The HomeBuilder scheme comes on top of first-home buyer stamp duty relief. Plus, even if you qualify for the First Home Loan Deposit Scheme, you can still apply for this newly announced program. Remember that you only need to deposit five per cent of the home’s price through the First Home Loan Deposit Scheme.
If you are indeed eligible for the HomeBuilder scheme, you can use the funds in many ways. One is towards your deposit, which can help ease the amount of your Lenders Mortgage Insurance significantly. You can also choose to borrow less money so that you can pay off the loan faster.
Both building and renovating a house are expensive projects. It is why the Government allows the citizens to take advantage of multiple programs. Aside from HomeBuilder, you can also apply for the First Home Loan Deposit Scheme and the First Home Buyers Grant if you are a first home buyer. These grants can help pay for any renovation or construction you may have in place.
A massive chunk of renovation and construction costs goes to flooring. If the floors inside the house are no longer as great as they used to be, it is time for a change.
You can use the grant to improve your interior flooring to polished concrete, for instance. The good news here is that concrete is one of the most affordable materials around. Polished concrete can cost as little as $25 for every square metre. Of course, it is a long process, which also involves grinding and sealing. You will end up paying around $50 per square metre.
Meanwhile, honed concrete can be a little more expensive, costing about $75 per square metre. If you plan to use mechanically polished floors, you may have to shell out approximately $100 per square metre.
All in all, concrete is an incredibly inexpensive material. Plus, it lasts for a long time due to its durability. Maintenance is also quite cheap, even when you use decorative concrete. But if it is more than you can handle, especially given the situation today with COVID-19, you can turn to the HomeBuilder grant for assistance.
As mentioned, you cannot use the grant to remodel any part of your home’s exterior. However, it does not mean you should halt your plans of renovating your garage or pool. Since the HomeBuilder scheme focuses on interiors, you can use the additional funds for those improvements. From there, you can use your own budget for outdoor renovation, which was initially intended for the interiors. For example, you can go for seamless pool edging, which can be a bit expensive without the help of the grant.
It is important to know that the program only recognises licenced contractors and builders, such as CoastCrete. Your upcoming project may easily qualify. If the construction falls within the specified timeframes, budget, and value, the grant provides a wonderful opportunity for homeowners to save.