On 4 June 2020, the Federal Government announced HomeBuilder – a federally-funded, State-Government-administered scheme providing a $25,000 grant for property owners in Mount Gambier, Hamilton, Warrnambool, Colac and Camperdown to buy, build or renovate a home, to stimulate the economy during COVID-19.
South Australian residents can now apply for the grant via Revenue SA’s website.
Victorians can apply here.
Additionally, Victoria’s State Revenue Office has announced that the introduction of Stage 4 Restrictions in metropolitan Melbourne, and Stage 3 in regional Victoria, mean Victorian HomeBuilder applicants will have an extra three months to get building started on their project.
These projects now have six months from signing a contract (rather than the original three) to get the work started.
This is the only change that’s been made at this stage – and the State Revenue Office also said they didn’t have authority to make any more changes.
The eligibility criteria for both states remains as before – so, regardless of where an applicant lives (or where their ‘HomeBuilder’ property is, or will be, located), potential applicants can now start preparing documentation and submissions, to ensure they can fit their planned works into the strict timeframe being applied to the scheme.
First things first though, how will HomeBuilder applications be submitted?
State Government’s revenue offices are administering the scheme (even though it’s a Federal-Government program.)
South Australia ‘s portal opened on 17 July 2020. You can access it here.
Victoria’s portal is now open, too. Click here to access it.
How do I know if I am eligible?
The eligibility criteria for HomeBuilder applies to:
- The applicants
- The Property the work will take place on
- The type of work being done
- The contract between the property owner and builder undertaking the work.
Applicant eligibility
HomeBuilder will be available to individual applicants and couples who are, or will be the registered owner of the property where the work will take place. This means they need to be registered as the owner on the certificate of title.
They must also be:
- A person (not a company or trust)
- Aged 18 years or older at the date the contract is signed
- An Australian citizen as of the date the contract is signed.
Applicants must also:
- Own the land where the work is to take place, OR
- Become the owner when the off-the-plan contract to build or renovate is complete.
Applicants’ income also comes into it. An applicant must also be below one of two income gaps:
- If the applicant is an individual, they must earn less than $125k per year, as determined by either their 2018/2019 or 2019/2020 taxable income
- If it’s a couple, their combined income cannot exceed $200,000 per year.
A ‘couple’ is considered two people who are either:
- Legally married
- In a registered domestic relationship
- Living as a couple in a genuine domestic basis (excluding relatives, eg: siblings.)
Property eligibility
The property the work is being undertaken on must be:
- Located in the relevant State to your application (eg: in South Australia, if you ware applying to RevenueSA)
- Fixed to your land (eg: it can’t be put towards a towable or mobile home)
- Suitable as a place of residence (so it can’t go towards building a new pool or tennis court)
- Owned by you – and this applies to both the land AND the building being planned
Investment properties are also ineligible.
The type of work being done
There are three categories of work that will be eligible for HomeBuilder – with strict criteria applying to all three:
- A new build
- A substantial renovation
- An off-the-plan home
If it’s either a new build, OR an off-the-plan home, you will need documentation (eg: from your financial institution) that shows the purpose of the loan for the property is for a primary residence, rather than investment.)
A substantial renovation can be
- Substantial changes to an existing dwelling
- Knocking down a home and building a new one on the same land. This applies to any applicants whose home was razed in the 2019/2020 bushfires, and they plan to rebuild on the same site.
All works are subject to a valuation cap, that applies to both the work being done, and the value of the land the dwelling is, or will be located on.
- New build – the property value of both the house and land can’t be more than $750,000
- Substantial renovation – the building contract for the work must be valued between $150,000 and $750,000, and the property value (house and land combined) prior to the work taking place can’t be more than $1.5million.
Eligible contracts
The contract you have with your builder will also be assessed to determine your eligibility for the $25k grant.
Considerations when it comes to your contract include:
- That any work is being done by a registered or licenced builder, who is named as a builder on the on the building licence or permit
- That construction has not taken place before 4 June 2020
- The builder is not an owner-builder.
- The owner and the builder negotiate the contract at what is called, ‘arm’s length’. This means the two parties negotiating the contract can’t have a special relationship, such as being family members.
- The contract must be ‘commercially reasonable’ in price – it shouldn’t be higher or lower than a fair market price
- The contract cannot have been signed before 4 June 2020
If I successfully apply for HomeBuilder, am I still eligible for a first home buyers grant?
Yes! If you’re in Victoria, a first home buyer can apply for both a HomeBuilder grant ($25k) AND a first home buyer grant ($20k), and end up with $45k to put towards their first home.
In South Australia, first home buyers’ grant is worth $15k, providing new home owners in that state a $40k head-start.
If you have more questions regarding HomeBuilder eligibility, Sinclair Wilson can help.
Our team of finance, tax and mortgage broking experts have been working hard during the COVID-19 period to ensure they know the all the finer details of the many grants, programs and assistance programs available.
Contact us to find out how HomeBuilder, and any other packages, apply to you.
