The government has confirmed it will give eligible Australians $25,000 to build new homes or substantially renovate their existing homes. This new boost is aimed at supporting the construction industry and keeping 1.2 million tradies in their jobs.
While some businesses in Australia are reopening and starting the journey back to normal trade (or as close as they can get to it), many other businesses are keenly aware that the greater impacts of Covid-19 have not yet hit them.
The construction industry has not yet felt the full brunt of recent economic events and the housing sector is marked as the next casualty of coronavirus’s impact on the economy with more than 60,000 construction and building jobs already being lost.
As Australians tightened their belts, investment in new home builds and renovations have dropped drastically and are only expected to continue doing so. Combined with the disintegration of immigration to Australia, which has historically been a boost to the housing market, forecasts suggest residential construction will drop by 50%.
Many businesses in this sector will start to see their greatest drops in revenue as their existing projects wind up over the coming months, just as the current JobKeeper and Cashflow boosts start to run out.
The HomeBuilder Grant will assist the residential construction market by encouraging Australians to commence new home builds and renovations this calendar year. The grant combined with record low-interest rates will be an attractive incentive for eligible Australians to start projects that they have been putting off.
Including renovations in this package will see funds start to circulate quickly as unlike new home builds, there is less red tape involved in a renovation. Master Builders Australia chief executive Denita Warn claims that including renovations would not only protect existing jobs but potentially create 24,036 new jobs.
Who is Eligible?
The grants will be means-tested and only individuals earning up to $125,000 or couples earning up to $200,000 will be eligible.
To qualify you must be an Australian citizen and the grant is only available to natural persons, not trusts or companies.
Owner-builders will not be eligible, and the funds cannot be used for investment properties.
A licenced builder must be engaged to complete the works and all eligible builders will need to be licensed and registered before the government’s announcement, which will restrict those trying to take advantage of the scheme.
When do I need to start building or renovating?
Contracts with a licensed builder will need to be entered between 4th June 2020 and 31 December 2020 with construction starting within 3 months of the contract date.
What can the grants be used for?
The grants will be available for building a new owner-occupied residence capped at $750,000.
Renovations need to cost between $150,000 to $750,000 – but the value of the home being altered must be less than $1.5million. The renovation must be undertaken on an existing principal place of residence.
Renovations can include this such as kitchen and bathroom renovations but cannot be used for add-ons that are not part of the main residence like swimming pools, tennis courts or detached granny flats.
Can I use this with other grants and schemes?
HomeBuilder is designed to work with existing State and First Home Owners Grants, Stamp Duty Concession, and other grant schemes including the Commonwealth First Home Loan Deposit Scheme and the First Home Super Saver Scheme.
How do I apply?
The grants will be administered by the State and Territory governments. Once they are ready to start accepting applications, they will be able to backdate acceptance to 4 June 2020.