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| Home Builder |
What is the Home Builder Grant Scheme?
The Home Builder grant scheme was designed to give the building industry a boost after taking a massive hit during the economic downturn.According to the Australian Bureau of Statistics, the GDP fell 0.3% in the first quarter of 2020 – ushering in Australia’s first economic recession since the 90s.
And while the economy did recover to 3.3% by the last quarter, the effects of the pandemic continued to spill over.
The Morrison Government turned to the housing sector to help create real jobs, with grants extending to home renovations and new builds.
How Does the Home Builder Grant Scheme Work?
Applicants were required to meet eligibility criteria for income caps and limits on property value. Renovation projects had to meet the same income thresholds and have plans to spend more than the value of the grant.To be eligible for a Home Builder grant:You must be an individual and not a company or trust.
You must be over 18 years old.
You must be an Australian citizen.
You must earn $125,000 per year as an individual or $200,000 per year as a couple.
You must build a residential home where the property value does not exceed:$950,000 in NSW
$850,000 in Victoria
$750,000 in all other states and territories
You must renovate your existing residential home where the renovation contract is between $150,000 and $750,000 and the property value is less than $1.5 million.
You must commence construction within six months of the contract date.
Given the spending requirement on renovations, most modern refits would not make the cut.
For example, a full-scale bathroom renovation costs around $19,500, while kitchen projects cost around $26,000. Both are well below the $150,000 minimum for renovation contracts required by the Home Builder scheme.
The grant also specifies that renovation must only “improve the accessibility, safety, and liveability of the dwelling”, which means it could not be used for extras such as:Swimming pools
Sports courts
Outdoor spas
Sheds or garages
Other Homeownership Assistance Available
Home Builder grants are non-taxable. They are designed to support other homeownership assistance available for new buyers, including:Stamp duty concessions
Stamp duty is imposed by state and territory governments when you buy real estate. It can be charged as a flat rate based on the property value. Check with your local government whether you are eligible for concessions or exemptions.First Home Owner Grant
The First Home Owner Grant (FHOG) is a government scheme that provides first home buyers with a one-off payment to purchase or build a residential home. In NSW, eligible applicants may qualify for a $10,000 grant if the property is brand new and worth $750,000 or less.First Home Super Saver Scheme
The First Home Super Saver Scheme allows Australians to make voluntary contributions to their super before and after taxation and then withdraw them to help buy their first home.First Home Loan Deposit Scheme
The First Home Loan Deposit Scheme (FHLDS) partially guarantees to grant about 10,000 low-deposit loans each fiscal year set aside for low- and middle-income workers. The required deposit could be as low as 5% of the property value.
The Australian Government also announced an additional 10,000 FHLDS places for people who are building or buying a new home.
While there are plenty of incentives available to first home buyers, the biggest factor affecting the cost of a home loan is the interest rate and other fees. Therefore, make sure to compare your options to get the loan package that best suits your capacity.
