The Australian Government has extended the HomeBuilder Grant to the 31st of March 2021. This is good news for many. However, you should be aware of some of the changes to the grant.
What is the HomeBuilder Grant?
The HomeBuilder Grant is an Australian Government initiative to boost the economy by incentivising construction. This scheme was implemented to prevent tradies and construction firms from going down during covid. Additionally, it also helped subsidise everyday people to build homes.
The HomeBuilder Grant allows owner-occupiers to claim a one-time payment to either build a new home or significantly renovate an existing one.
What’s Changing?
Previously, you could claim $25,000 from the Grant. However, the grant has been reduced to $15,000 for those who apply in the first 3 months of 2021. You will need to enter a contract by the 31st of March, and apply before the 14th of April.
Are You Eligible?
There is a relatively strict criteria to be eligible for the grant.
Firstly you must be a ‘natural person’ over the age of 18. That means you cannot claim on behalf of a trust or a company. You cannot claim the HomeBuilder Grant more than once.
Secondly, you need to be an Australian citizen. Permanent residents or visa holders are not eligible. If your property is registered with two owners – you must apply for the grant as a couple. Both of you must meet the eligibility requirements.
Thirdly, your income must be below a certain cap:
- $125,000 per year for an individual based on the last financial year
- $200,000 per year for a couple based on the last financial year
Finally, you need to live in the property that has been constructed as per the Grant for at least 6 months continuously. This means you cannot use the Grant for holiday homes or investment properties.
Tip: The HomeBuilder Grant can be claimed in conjunction with the First Home Owner’s Grant or the First Home Buyers Assistance Scheme.
Is Your Home Eligible?
For the Home to be eligible it needs to be located in NSW, and be owned by you. There are three instances in which you can claim the HomeBuilder Grant.
- A home building contract to build a new home as your principal residence where the value does not exceed $950,000. (inclusive of GST)
- A contract to ‘substantially renovate’ your home where the existing value of it does not exceed $1.5 million. The renovation contract itself must be between $150,000 and $750,000.
- A contract to purchase an ‘off the plan’ home as your principal place of residence where the contract price does not exceed $950,000 and the construction had not commenced prior to 4th June 2020.
Note: If your home was destroyed during the 2019/20 bushfires, and you are demolishing it to rebuild – it will qualify as a ‘substantial renovation.
Importantly, ‘substantial renovations’ need to serve a practical purpose to improve the ‘accessibility, safety or liveability of the property.’ This means the grant does not apply to the construction of tennis courts, swimming pools or cosmetic renovations such as landscaping or painting.
These contracts need to be taken with a licensed contractor and construction needs to begin within 6 months of the contract. This is to prevent construction companies from stacking up a number of contracts with no intention of immediate construction.
Summary
The HomeBuilder Grant is a fantastic opportunity for many to buy new homes or upgrade their existing homes. Be aware of all the eligibility requirements that go into the application and be sure to apply by the relevant key dates. Evaluating a property for the eligibility requirements, or simply going through the process of buying a new home can be a complex one. Be sure to consult with our property lawyers to get the appropriate legal advice.
