Great news for Australians dreaming of buying their own home. The Federal Government’s new HomeBuilder scheme provides eligible owner-occupiers with a grant of $25,000 to build a new home or substantially renovate an existing home. This will be a welcome relief to many Australians and the country’s economy as it tries to navigate its way out of the current health crisis.
Here is an overview of the HomeBuilder grant –
- The grant is a limited time, tax-free grant for purchasers that sign a contract between 4th June and 31st December 2020.
- The grant is open to individuals who are Australian citizens aged 18 years and over (companies and trusts are not eligible).
- The grant is means tested, therefore singles must have an income less than $125,000 and couples with a combined income of less than $200,000 according to their 2018-19 tax return or later.
- The new home build must be the principal place of residence, with a property value (house and land) that does not exceed $750,000; or
- Substantially renovate an existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000 and the value of the existing property (house and land) does not exceed $1.5 million.
- Construction for the new home or renovation must commence within three months of the contract date.
For up-to date information on the HomeBuilder grant please visit - https://treasury.gov.au/coronavirus/homebuilder
How does the process work?
You will need to lodge your application for the HomeBuilder grant with the relevant State Revenue Office. The State Revenue Office will conduct the searches to ensure that the purchaser/s are eligible. You will then be notified by the State
Revenue Office of the outcome of your application. If you qualify, the State Revenue Office will pay the HomeBuilder grant to you.
What if you already have land but have not signed a build contract, do you qualify?
Good news, yes you will qualify provided you meet the criteria for the HomeBuilder grant.
Do home builders or buyers looking at an investment property qualify?
No, owner builders and those seeking to build a new home or renovate an existing home as an investment property are ineligible for HomeBuilder.
What about existing grants for First Home Buyers?
More good news for first home buyers.
First home buyers can still qualify for the Victorian Government’s first home owner grant (FHOG) of $10,000 for non-regional Victoria and $20,000 for regional areas. First home buyers may also be eligible for, and receive, other exemptions, concessions or reduction in stamp duty. For up-to-date information and eligibility criteria on the FHOG as well as exemptions, concessions or reductions in stamp duty for first home buyers, please visit: https://www.sro.vic.gov.au/first-home-owner
The Commonwealth’s First Home Loan Deposit Scheme (FHLDS) could also be available to you, provided the criteria is met. This scheme provides eligible purchasers with the opportunity to purchase property on a deposit as low as 5%, with the Federal Government acting as guarantor for the remaining balance – around 15% of the typical 20% deposit that most lenders require in order to avoid the need for lenders mortgage insurance. For up-to-date information and eligibility criteria on the Scheme, please visit: https://www.nhfic.gov.au/what-we-do/fhlds/.
There is also the Australian Government First home super saver (FHSS) scheme which allows Australian citizens to save money for their first home inside their super fund. For up-to-date information and eligibility criteria on the Scheme, please visit: https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/first-home-super-saver-scheme/
What if I am not a First Home Buyer, but I am buying or building my principal place of residence?
Yes, you will qualify provided you meet the criteria for the HomeBuilder grant. For up-to-date information on the HomeBuilder grant, please visit: https://treasury.gov.au/coronavirus/homebuilder
There may also be other exemption or concessions in stamp duty available to you if you are buying your principal place of residence. For up-to-date information and eligibility criteria available for a purchaser of principal place of residence, please visit:
- https://www.sro.vic.gov.au/pprconcessions
- https://www.sro.vic.gov.au/Pensionerdutyconcession
- https://www.sro.vic.gov.au/first-home-owner/apply-young-farmer-duty-exemption-or-concession
- https://www.sro.vic.gov.au/buyer-grants-concessions
Disclaimer:
Information herein has been obtained from government and other sources and Dennis Family Corporation does not assume responsibility for the accuracy or completeness of any information published other than to the extent required by law. Please consult the URL webpages referenced above for up-to-date information. Contents herein are for general information only and do not constitute investment, legal, business, tax, financial, or other advice. You should consult your professional adviser for legal, business or tax advice before making decisions. © 2020 Dennis Family Corporation Pty Ltd