The Government has announced a new HomeBuilder Package which provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home. The government said the package will assist the residential construction market by encouraging the commencement of new home builds and renovations this year.
Summary of the HomeBuilder Package
HomeBuilder is a time-limited grant program to help the residential construction market to bounce back from the Coronavirus crisis.
HomeBuilder will provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020. Construction must commence within three months of the contract date.
HomeBuilder will complement existing State and Territory First Home Owner Grant programs, stamp duty concessions and other grant schemes, as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.
To access HomeBuilder, owner-occupiers must meet the following eligibility criteria:
- you are a natural person (not a company or trust);
- you are aged 18 years or older;
- you are an Australian citizen;
- you meet one of the following two income caps:
- $125,000 per annum for an individual applicant based on your 2018-19 tax return or later; or
- $200,000 per annum for a couple based on both 2018-19 tax returns or later;
- you enter into a building contract between 4 June 2020 and 31 December 2020 to either:
- build a new home as a principal place of residence, where the property value does not exceed $750,000; or
- substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property does not exceed $1.5 million;
- construction must commence within three months of the contract date.
Process and timing
HomeBuilder will be implemented via a National Partnership Agreement, signed by the Commonwealth and State and Territory governments. This approach will utilise existing state and territory mechanisms to distribute the HomeBuilder payments.
When the States and Territories begin accepting HomeBuilder applications, they will backdate acceptance of these applications to 4 June 2020.
Information on when and how you will be able to access HomeBuilder will become available through the relevant State or Territory revenue office.
WARNING！ Owner-builders and those seeking to build a new home or renovate an existing home as an investment property are ineligible for HomeBuilder.
In negotiating a building contact, the parties must deal with each other at arm’s length. This means the contract must be made by two parties freely and independently of each other, and without some special relationship, such as being a relative. The terms of the contract should be commercially reasonable and the contract price should not be inflated compared to the fair market price.
Renovations or building work must be undertaken by a registered or licenced building service ‘contractor’ (depending on the state or territory you live in) and named as a builder on the building licence or permit.
The 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).
HomeBuilder will be non-taxable – consistent with existing state and territory First Home Owner Grant programs.
CLOUD8 RECOMMENDATIONS AND SOLUTIONS
We believe the application of this Homebuilder package is quite limited as its only available for taxpayers’ main residence.
We are also disappointed to see that the Government policies start to distinguish between permanent residents and citizens. We believe same policy should be available to all Australian PRs and Citizens.
If you would like to know more about the package, simplify book an obligation appointment with the button below: