Will the HomeBuilder Grant help you? The details are here!

The Homebuilder Grant is a $25,000 Australian government house grant that seeks to fund eligible citizens and first-time homeowners to build or renovate their homes.

The grant is included in the new tax-free grant program announced by the Federal Government to help revive the residential construction market during the economic downturn caused by the 2020 pandemic. On June 3, the Australian Bureau of Statistics data showed the country’s gross domestic product which is now down by 0.3% in the March quarter. This is now the slowest period of growth since 2009 in the midst of the global financial crisis.

According to Prime Minister Scott Morrison, the grant aims to help the economy recover and create jobs for the industry in order to lessen the impact of the incoming recession. He urges people who have been putting off renovating their homes get that extra $25,000 grant now that interest rates are at records low. The scheme will last until the end of the year and aims to build more than 30,000 new homes before 2021.

The Homebuilder grant will mean more jobs, stronger small businesses, and newer homes. This will provide a small but impactful economic recovery for Australia. The Homebuilder scheme is currently available on building contracts signed between June 4th to December 2020. Read on to learn more about it.

Are You Eligible?
The HomeBuilder grant is here to help you finish all your home building and renovating projects. However, you need to be eligible to enjoy the benefits. Eligibility is largely based on income so that more Australians in the lower economic brackets can be prioritized. The grant excludes wealthy buyers and homeowners that are more or less won’t be that much affected financially by the pandemic. Here are the several qualifying criteria including:

The type of property you own. (You can read the eligible properties further down the article.)
Your annual income – the income cap is at $125k for individuals and $200k for couples (assessed using last year taxes or later)

Your builder
Only applicants over 18 are allowed and they should be Australian citizens, not representatives of trusts or companies. They should also be owner-occupiers and not investors.

Your building contract must be between June 4, 2020, and December 31, 2020, and the building should start within 3 months after the contract is placed.

Build homes that are less than $750k
Renovate existing homes that cost between $150k – $750k
The final property value shouldn’t exceed $1.5 million

How To Apply?
The grant will take effect after the National Partnership Agreement is signed by the Commonwealth and State and Territory governments. This means that you can apply when your state or territory you want to live in signs the agreement.

The bank is primarily responsible for the eligibility checks. To apply for the grant as a first-time homebuyer, you have to enter into a contract and have your bank apply at the state revenue office to receive the grant. For more details about the application, you can go to your state revenue office.

Can the Homebuilder grant be used as a deposit?
Currently, lenders have not updated their policies about the grant but there’s seems to be a unanimous decision from all including the banks. Banks aren’t willing to give loans to people with no personal savings even if they used the cash as a deposit.

Deposit from grants are only given to owners whose houses are currently being built. If you want to buy land, you will need a deposit from your own savings.

The government hasn’t confirmed the time frame as to when they will start paying the grant, the only thing that they promised is each state revenue offices will be the ones to distribute the $25,000 grant directly to the applicant—which means the grant will directly go to your account once approved. Depending on where you live, you could also potentially get more than double the amount.

What kind of properties is eligible for the Homebuilder Grant?
Here are the type of properties that are allowed in the Homebuilder Grant

  • Apartments
  • Buildings on vacant land
  • Houses
  • Land packages
  • Pre-fabricated houses
  • Renovated properties
  • Off the plan

For pre-fabricated houses, the grant is only allowed if the construction is done by a licensed builder which meets all the eligibility requirements. For renovations, it must be within three months of the contract date. Renovations should also focus on substantial projects. This means you’re only allowed to renovate areas that improve the liveability, safety, and accessibility of your property. Renovations that are for improving the aesthetics of the home or luxury builds such as pools, garages, saunas, and sheds aren’t allowed. Homebuilder grants are also not for building or renovating investment properties.

Other Frequently Asked Questions

Do you need to be a first-home buyer?
All homeowners not only first time home buyers that meet the income criteria can also receive the grant. So if you’re a moderate-income earning citizen, you can still be eligible.

Can I get the grant as an investor?
Only homeowners are eligible for the grant. You can’t use the grant to build your investment property.

Can I use any builder I want?
Only registered and licensed builders in the state or territory are allowed. The contract should also be made by two independent parties meaning you shouldn’t have any special relationship with the contractor. You shouldn’t hire someone who is your relative or family member.

Need help with a loan? Contact V Corp, today!

References:
https://www.homeloanexperts.com.au/coronavirus-updates/homebuilder-grant/
https://www.abc.net.au/news/2020-06-11/question-can-homebuilder-grant-be-used-as-deposit-confuse-buyers/12339646