Bob the Builder – can we fix it?

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The Government has announced grants of $25,000 to encourage people to build a new home or substantially renovate their existing home.

The HomeBuilder scheme targets the residential construction market by providing tax-free grants of $25,000 to eligible owner-occupiers, including first home buyers, to build a new home or substantially renovate their existing home.

Federal and State counterparts are still working out the finer details on exactly who will be administering the scheme.

Eligibility

Eligibility criteria apply to the individuals applying for the grant and the building project:

Individual eligibility

The HomeBuilder scheme is available to owner occupiers including first home buyers. It is not accessible to owner builders, developers or investors.

To be eligible you need to be:

  • An individual (not a company or trust); and

  • 18 years of age or older; and

  • An Australian citizen.

And, you need to meet the income test. To be eligible, you cannot earn more than:

  • Individuals - $125,000 based on your 2018-19 or later tax return

  • Couples - $200,000 based on both of your 2018-29 or later tax returns

The building project eligibility

The building contract must be signed between 4 June 2020 and 31 December 2020. And, the construction or renovation must commence within three months of the contract date.

The grants are available if you build a new home or renovate a home to live in (your principal place of residence) where:

New home*

  • The property value (house and land) does not exceed $750,000

Renovation**

  • Substantially renovate your existing home, where:

    • The renovation contract is between $150,000 and $750,000, and

    • The value of your existing property (house and land) does not exceed $1.5 million

* house, apartment, house and land package, off-the-plan, etc.

** renovation works must be to improve the accessibility, safety and liveability of the dwelling. It cannot be for additions to the property (such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages (unconnected to the property)).

If you own or have purchased land but have not signed a contract to build your home, you may meet the eligibility criteria if you:

  • Own a property (house and land), and knock down the house to rebuild – this will be counted as a substantial renovation, and therefore subject to the renovation price range of $150,000 to $750,000 provided the total value (house and land) of the property does not exceed $1.5 million pre-renovation;

  • Own vacant land before 4 June 2020, and then build, the total value of the land and new build cannot exceed $750,000; or

  • Buy the land after 4 June 2020, and then build, the total value of the land and build cannot exceed $750,000.

Interaction with first home owner grant schemes

The HomeBuyer grant does not exclude first home buyers from accessing other grants and concessions such as the First Home Owner Grant, stamp duty concessions, the First Home Loan Deposit Scheme, and First Home Super Saver Scheme.

To register your interest for the scheme, please click here.

Shake tax, not hands – get in touch with m+h Private Property Specialists today on +61 3036 7174 to see how we can help deliver the best support to you and your business.

As always, the above is general in nature, please discuss with your trusted advisor.

James Hoeftm+h Private