By Daniel VelichTaxation Principal
11 June 2020
Last week it was announced that the Federal Government is offering cash grants of $25,000 to eligible applicants to build a new home or substantially renovate an existing home. The question remains who is eligible, and will it benefit me?
To be eligible for the HomeBuilder grant, you must:
- Be an Australian citizen, aged 18 or older;
- Satisfy the income test that is you earned less than $125,000 per annum for an individual applicant, or $200,000 per annum for a couple;
- Enter into a building contract between 4 June 2020 and 31 December 2020 to either build a new home as a principal place of residence, where the property value does not exceed $750,000; or substantially renovate your existing home, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property does not exceed $1.5 million; and
- Ensure construction commences within three months of the contract date.
Owner-builders and those seeking to build a new home which will be used as an investment property, or renovate an existing home which is an investment property, will not be eligible for the HomeBuilder Grant.
Building a new house?
The HomeBuilder Grant applies differently depending on whether you are knocking down an existing dwelling or building a vacant block of land.
- If you own a property (house and land), and knock the house down to rebuild – this will be counted as a substantial renovation, and therefore subject to the renovation price range of $150,000 to $750,000 provided the total value (house and land) of the property does not exceed $1.5 million prerenovation;
- If you own vacant land before 4 June 2020, and then build, the total value of the land and new build cannot exceed $750,000; or
- If you buy the land after announcement, and then build, the total value of the land and build cannot exceed $750,000.
All dwelling types (house, apartment, house and land package, off-the-plan, etc) are eligible under HomeBuilder. You do not have to be a first home buyer to be eligible for this grant.
HomeBuilder applications will be made via the relevant State and Territory authorities. Applications are not open however government will backdate acceptance of these applications to 4 June 2020.
Please contact your PKF adviser to discuss further.