To boost new construction projects in the wake of COVID-19, the Federal Government will give eligible Australian homeowners a $25,000 grant to go towards a new home build or a substantial renovation of an existing home. The scheme is aimed at incentivising homeowners to invest in their properties while also providing much needed demand for the construction sector. Read on to find out if you are eligible for the grant.
Government’s HomeBuilder Scheme
Eligible owner-occupiers and first home buyers will soon be able to apply for Government’s HomeBuilder scheme, a $25,000 grant that can be used to fund a new home build or an extensive renovation in an existing home.
The key points of the scheme are summed up below:
- The scheme will provide a $25,000 grant to eligible homeowners, but recipients will need to spend at least $150,000 of their own money.
- The grants will be means-tested and will exclude couples who earn more than $200,000 per year and individuals who earn more than $125,000 per year.
- Limits will also be placed on the value of the property the grants go towards, with new builds capped at $750,000 and renovations costing anywhere between $150,000 and $750,000.
- Properties being renovated can only be subsidised if valued at less than $1.5 million.
- The scheme will not apply to investment properties or owners who intend to build or renovate on their own without the help of builders.
- To be eligible for the grants, homeowners will need to enlist a licensed builder to complete the works.
- All eligible builders are required to be licensed or registered, negating a concern raised by some in the industry that the Government grant would incentivise “cowboys” with little regard for health and safety.
- Renovation work will not include structures separate to the main property, such as swimming pools, tennis courts and sheds.
- The scheme will be available for a six month period from July to December 2020.
Saving jobs and providing funding
Prime Minister Scott Morrison said HomeBuilder could help save jobs at a time when the industry was facing extreme uncertainty.
"This is about targeted taxpayer support for a limited time using existing systems to ensure the money gets used how it should by families looking for that bit of extra help to make significant investments themselves," he said.
"If you’ve been putting off that renovation or new build, the extra $25,000 we're putting on the table, along with record-low interest rates, means now's the time to get started."
"Our expectation is that many thousands of Australians will use this as an opportunity," he said.
Contact a Mortgage Express broker if you’re considering a new build or a major renovation in the next six months, to find out if you qualify for Government’s HomeBuilder Scheme. Our brokers can also assist you to apply for a home equity loan allowing you to tap into your home’s existing equity to finance an extensive home renovation.
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