Last week, the Australian Government announced a new HomeBuilder grant to inject more life into the residential construction sector and help the market recover from the Coronavirus pandemic. This program is expected to have a cost of $680 million and provide approximately 27,000 grants for all, creating roughly 140,000 direct jobs and another 1 million associated jobs in the residential construction industry.

In this article, we will look at some of the questions that you may have, and hear about how this grant might impact your local builders and families that are planning to build or renovate.

What is the HomeBuilder grant?

Time-limited and tax-free, this grant provides $25,000 to Australians who are planning to build a new home or substantially renovating an existing one.

Am I eligible for the HomeBuilder grant?

This grant is available to all Aussies building a new home worth less than $750,000 (including land) and must spend at least $150,000.

It can be used for renovating your primary residence for between $150,000 and $750,000, and it must be valued at less than $1.5 million before the renovations.

This grant is also means-tested and only available to single applicants with an annual income less than $125,00 or $200,000 per couple.

This program will only be available for building contracts signed between June 4th and December 31st 2020 and constructions must start within three months of the contract date. If you wish to apply for this grant, you need to move quickly.

Can I use the HomeBuilder grant on top of the First Home Owners grant?

Provided you meet the eligibility criteria, all homeowner-occupiers will receive the grant, regardless of whether you are a first home buyer or not. That $25,000 can be accessed on top of any state and territory grants and could be a game-changer.

Are there any restrictions on the HomeBuilder grant?

This grant has a number of limitations, the main ones are:

• Not available for your investment properties or if you’re an owner-builder
• Building or reno work must be carried out by a registered or licensed builder
• Cannot be used to build swimming pools, tennis courts, outdoor spas and saunas, sheds or garages

What can I spend the HomeBuilder grant on?

To maximise the impact of this grant, we suggest the following:

1. Consult an architect to design a space that works efficiently
2. Remodel kitchen and bathrooms to improve livability
3. Knock down walls for an open plan living
4. Upgrade to better quality fixtures
5. Build larger open areas to create more space
6. Build extra rooms to add structure and value to your home

What do builders think of the HomeBuilder grant?

“There are many workers within the construction industry who have been let go, we hope this grant will help people return to work,” said Michael Taouk, one of two Melbourne brothers who started their construction company Toak Projects. “We’ll definitely be hiring more workers as a direct impact of this grant because it gives us the opportunity to assist more people in building their dream homes.”

Michael also pointed out that while their business hadn’t slowed down due to coronavirus, they had adapted to maintain the highest safety standards and implement social distancing on sites.

However, the scheme has received some backlash from the public, claiming the need to spend at least $150,000 to be eligible.

“As the grant is an economic response to assist the residential construction market bounce back from coronavirus, giving a minimum spend will help ensure a range of different trades can be utilised for larger projects,” he said.

Designed to protect the jobs in the construction industry – one that is facing a steep decline in the coming months, this grant aims to help Australia with its economic recovery post-pandemic.

Create more jobs, build better homes

In Adelaide, Gavan runs Builders At Your Service – an expert in home building and renovations that has been around for 33 years.

Due to the COVID-19 lockdown, some of his clients have mothballed their building projects. This extra $25,000 has just given them the boost of confidence to kickstart their work now.

“$150,000 minimum spend might sound like a lot; it also means it’s a larger job. With more labour force, you can get better results and value for money,” said Gavan. “My clients are quite excited about it, they’ve rung me and asked if there was anything I could do for them. They want to qualify for the grant to build their dream home. It’s definitely come at the right time.”

He also suggested that homeowners should put more work in home extensions and adding structure to their house instead of just renovating bathrooms and kitchens.

“Lots of people have no idea what they want, and it always ends up costing them more. That’s why we tell them to give us a call, get a quote, and we’ll help them figure out what they can get within their budget,” said Gavan.

When asked about the timing of renovations, both builders have advised their clients to get the builders involved early in the planning stage. This is to ensure they could guide and recommend ideas that would fit both their design aspirations as well as budget.

Impact of the HomeBuilder Grant on a small family

 “Honestly, the timing for this grant is perfect. I’m glad we’ll be able to get a subsidy from the Government,” said homeowner Tessa, a graphic designer from Brunswick.

With a young daughter and another baby on the way, she and her husband Josh were already planning on renovating for their growing family and could not be more delighted about this scheme.

“We’ve been putting off this project for years. We started making realistic renovation plans and requesting quotes at the start of the year before I fell pregnant, and this has just hurried us along,” she said. Having lived in this suburb for the past 7 years, Tessa also said their mid-90s townhouse needed a transformation of the unused cavity into extra space for their new family member.

I think I’m eligible for the HomeBuilder grant, what next?

1. Keep an eye out for the application details on the Treasury website
2. Create a checklist for what to change and what to keep
3. Check building codes and permits required
4. Detail your plan, timeline and your budget
5. Get 3 free quotes from local licensed builders and compare
6. Enjoy the ride

Source: https://treasury.gov.au/coronavirus/homebuilder