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HomeBuilder grant: Who is eligible and what can you spend it on?

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On the heels of announcing that this years’ bushfires and coronavirus pandemic have tipped Australia into its first recession in 29 years Scott Morrison’s government has introduced another stimulus package named the HomeBuilder grant.

What is the HomeBuilder grant?

The original HomeBuilder grant is a $25,000 grant available to homeowners who wish to renovate or build a new home. It is part of a $688 million package aimed at reviving the property and construction industry following the downturn off the back of the Covid-19 pandemic. It applies to building contracts entered into up to 31 December 2020.

What is the extended HomeBuilder program?

A modified version of the HomeBuilder program has been announced, extending the program until 31 March 2021. The altered program will provide a $15,000 grant for new builds and significant renovations where contracts have been signed between 1 January 2021 and 31 March 2021.

Also changing is the property price cap in certain states, which is set to increase to $950,000 in New South Wales and $850,000 in Victoria. In all other states and territories, the $750,000 price will still apply.

The original program will still be available for contracts signed up to the 31 December 2020 date.

What’s the eligibility criteria for the HomeBuilder grant?

To qualify for the original HomeBuilder program, you need to:

  • Be a prospective or current owner-occupier. HomeBuilder is not available to investors.
  • Intend on spending more than $150,000 on a renovation.
  • If you’re building a new home, the property must be worth less than $750,000.
  • If you are renovating an existing property, the home needs to be valued at less than $1.5 million.
  • The original grant is only available for contracts signed up until New Year’s Eve 2020 and construction must be contracted to start within three months.

To qualify for the extended HomeBuilder program, you need to:

  • Be a prospective or current owner-occupier. HomeBuilder is not available to investors.
  • Intend on spending more than $150,000 on a renovation.
  • In NSW and VIC, the property price cap for new build contracts is at $950,000 and $850,000 respectively.
  • For all other states, the property price cap is at $750,000.
  • If you are renovating an existing property, the home needs to be valued at less than $1.5 million.
  • To be eligible for the extended program, you must sign a building contract between 1 January 2021 and 31 March 2021.

For both versions of the HomeBuilder program, the deadline for applications is 14 April 2021. This deadline applies to contracts signed on or after 4 June 2020.

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What can you spend the HomeBuilder grant on?

The grant money must be spent on:

  • A renovation valued between $150,000 and $750,000. This renovation must improve the property’s accessibility, safety and livability.
    • Note: It cannot be used for additions to the property that are unconnected to the residence such as a new shed, garage, granny flat, swimming pool, tennis court, outdoor spas and saunas.
  • Building a new home valued up to $750,000, that you intend to use as your principal place of residence.

What is the income criteria for the HomeBuilder grant?

Applicants for HomeBuilder must also meet the following two income caps to qualify for the scheme.

  • Singles must be earning $125,000 or less based on their 2018/19 tax return or later.
  • Couples must have a combined income of less than $200,000 based on their tax returns.

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Can you qualify for both the HomeBuilder Grand and other schemes and grants?

Yes.

What other grants and schemes could you qualify for?

As a first home buyer, there are a number of grants you could potentially qualify for.

  • The First Home Loan Deposit Scheme allows buyers who have as little as a 5% deposit to avoid paying Lenders Mortgage Insurance.
  • Depending on where you live, buyers could also access the First Home Owner Grant. While these do come with strict criteria it could unlock an extra $10,000 for prospective buyers.

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The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.

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