It only felt like yesterday, that owning your own home seemed like an impossible mountain to climb, especially with interest rates rocketing past 6%.
For most Australians, purchasing your very first home is a great achievement shared by many. I know it was definitely a milestone for my partner and I when we finally received the keys to our very first home.
Currently, there are a number of government grants available including the first home owner grant, which provides first home buyers with a $10,000 grant towards the purchase of a new home.
In wake of the COVID-19 pandemic, we’ve now seen a few more home building grants pop up on our radar, including HomeBuilders, and WA-specific; Building Bonus and Off-the-plan duty rebate. The grants have been designed to assist the residential construction market by encouraging the commencement of new home builds and renovations during the crisis.
Okay, cool, you’ve now caught my attention Australian Government, what’s the catch?
I mean there’s always a catch right? How do I actually qualify for a HomeBuilders grant? Am I eligible? Unfortunately, it’s never as simple as handing out cash to someone, but then again, buying a house isn’t exactly like buying milk from your local IGA.
So we’ve decided to break it all down and summarise the most important parts you need to know.
What is the HomeBuilders Grant & how do you qualify?
The HomeBuilders grant is a $25,000 tax-free grant given to owner-occupiers, including first home buyers. The grant can be used to either:
- Build a new home, or
- Renovate an existing home
How do you qualify for the HomeBuilders grant?
The grant is available for eligible first home buyers and existing homeowners who:
- Spend at least $150,000 to $750,000 on a new build or renovations (must be principal place of residence)
- The value of a new build (including house and land) must not exceed $750,000
- For renovations, the value of the property (house and land) must not exceed $1.5million
- Must be 18 years or older
- Must be an Australian citizen
- Meet one of the following two income caps:
- Singles must be earning $125,000 or less based on their FY19 tax return or later
- Couples must have a combined income of no more than $200m000 based on their FY19 tax returns or later.
- Must enter into a building contract between 4 June 2020 to 31 December 2020
- Construction must commence within three months of contract date
Who is not eligible for a HomeBuilders grant?
- Property investors
- Owner builders
- Companies and trustees
- Temporary or permanent residents
HomeBuilders Grant FAQ
When do I get the grant?
You will receive the bonus once construction or renovation begins.
Can the HomeBuilders grant be used as a deposit?
For the time being until lenders update their policies, the grant can be used to fund the cost of construction but cannot be used as the deposit. You will still need to come up with a 5%-10%-20% deposit.
What type of dwellings qualify for HomeBuilder?
Providing you meet the eligibility requirements listed above, the following types of dwellings are accepted:
- Land package
- Off the plan
- Building on vacant land
- Prefabricated houses are also considered for HomeBuilder if the construction is undertaken by a licensed builder and meets all the other eligibility requirements.
If you’re renovating your property:
- Renovation must commence within three months of the contract date.
- It must improve the accessibility, livability and safety of the property. Therefore, renovations like a swimming pool, tennis court, shed, and so on are not allowed.
- The renovation must be completed by a licensed or registered builder.
Are you planning on a home massive renovation that requires tearing down walls and flooring? Talk to us for quotes on floor sawing and wall cutting.
For more FAQ’s and information on what type of dwellings are eligible, for example what if the renovation contract includes works that are both eligible and ineligible — existing dwelling and landscaping? Simply click here.
How do I apply for the Homebuilder grant in my state?
Follow the instructions we’ve laid out in our article on how to apply for the Homebuilder grant in each state.
What is the Building Bonus grant & how do you qualify?
Building Bonus grants of $20,000 are available for people who enter into a contract to build a new home on vacant land or purchase a new home being constructed under a single-tier development on a strata plan or other land survey type. It is a local state government initiative that is not to be confused with the HomeBuilders grant, which is run by the Australian Government.
How do you qualify for the Building Bonus Grant?
- Enter into a contract to build a new home on vacant land or,
- Enter into an off-the-plan contract to purchase a new home as part of a single-tier development on a strata plan or other land survey type
- Contract must be entered into between 4 June 2020 to 31 December 2020
Who is eligible for the Building Bonus grant?
- Owner occupiers and investors
- Australian citizens, permanent residents and foreign persons
- Natural persons, corporations and trustees
Building Bonus FAQ
Can I get a Building Bonus Grant, a HomeBuilders grant, AND a First Home Buyers Grant?
Ahhh the question on everyone’s mind, can I claim them all? In short, yes you can. Eligible first homebuyers will be able to access both State and Australian Government grants, the existing FHOG $10,000, as well as the first home buyer transfer duty concession, which means potentially up to $69,440, could be provided to WA first home buyers.
Is there any means test or property value cap?
Unlike the HomeBuilders grant, the states Building Bonus Scheme does not include an income test or cap the value of the property.
What type of dwellings are eligible for the grant?
- New detached homes constructed under a building contract
- New relocatable homes
- New homes constructed by an owner-builder
- New single-tiered homes on strata plans such as villas and townhouses
- New single-tiered homes on other land survey types
Properties that do not qualify for the grant:
- Properties in multi-tiered developments such as an apartment tower (these may qualify for the off-the-plan duty rebate)
- Mixed use and commercial property
- Short stay accommodation
- New constructions where there is already a home on the land, for example adding a granny flat to the backyard of a person’s home
- Refurbished property and developments, including where the original property is extended or renovated. (substantial renovations may qualify for the HomeBuilders grant)
- Completed dwellings (existing stock) held by the developer or another person
For more FAQ’s and how to apply for a Building Bonus Grant, Simply click here.
What is an Off-The-Plan Duty Rebate?
A rebate is available for those who enter into a pre-construction contract to purchase a new residential unit or apartment that is off the plan, or for those who enter into a new contract to purchase a new unit or apartment that’s under construction.
How do you qualify for the Off-The-Plan Duty Rebate?
- Enter into a pre-construction contract between 23 October 2019 to 23 October 2021 to purchase a new residential unit or apartment
- A contract signed between 4 June 2020 to 31 December 2020 to purchase a new unit or apartment under construction
Who is eligible for the Off-The-Plan Duty Rebate?
- Owner occupiers and investors
- Australian citizens and foregin persons
- Natural persons, corporations and trustees
Off-The-Plan Duty Rebate FAQs
How much is the rebate?
The rebate will be 75% of the duty paid on the purchase up to $25,000 for a contract which has already commenced construction. And capped at a maximum of $50,000 for pre-construction contracts.
What is the existing rebate?
The existing rebate applies to the purchase of an off-the-plan dwelling in multi-tiered development that has not started being built, falling under pre-construction contracts. The rebate for pre-construction contracts is 75% of the duty paid on the purchase up to $50,000.
For more FAQ’s and how to apply for an off-the-plan duty rebate, Simply click here.