Unless you’re benefiting from spending $150,000 to $750,000 of your own money, is the $25,000 cash from the HomeBuilders renovation scheme even worth it?
The Australian Government’s HomeBuilder scheme allows eligible homeowners to apply for a tax-free grant of $25,000 if they are spending between $150,000 to $750,000 renovating or building a new home.
In other words, if you can’t afford to spend a minimum of $150,000, you will unfortunately not gain access to the grant. So who’s really benefiting from the HomeBuilder scheme?
For the average joes and janes, with dreams of renovating only their bathroom or kitchen, will sadly have to put their projects on the backburner.
Let’s take a look at the average costs of renovations that add value
To give you an idea, here’s what it would take to reach $150,000 in renovations.
- The average cost of a budget or cosmetic bathroom renovation of a smaller size using budget materials and fittings: $5,000 to $15,000
- The average cost of a bathroom renovation of a standard size, mid-tier bathroom using mid-tier materials and fittings: $15,000 to $30,000
- The average cost of a bathroom renovation that’s high end, premium or luxury using top-tier materials and fittings: $30,000++
- The average cost of a smaller kitchen renovation using budget materials and fittings: $10,000 to $20,000
- The average cost of a mid-size kitchen renovation using both budget and high-end materials, fittings and appliances: $20,000 to $45,000
- The average cost of a high-end kitchen renovation using top-tier materials, fittings and appliances: $45,000++
Master bedroom renovations
- The average cost of renovating a master bedroom on a budget with minor changes: $2,000
- The average cost of renovating a master bedroom with a mid-range budget: $4,000
- The average cost of renovating a master bedroom with a high-end budget: $35,000 to $80,000
- The average cost of a home extension ranges from $164,500 to $310,000
Remember, to be eligible for the grant the house you’re renovating must be valued at less than $1.5 million prior to renovations. So…
Do you renovate your current home or build new?
To some, $150,000 to $750,000 is a drop in the ocean and the decision to renovate or build is agreed upon in passing conversation over a cuppa. For most, it’s a decision that if went awry, could have crippling repercussions for years to come.
When it comes to renovating, it’s not just about what renovations will add value to a house, although it’s definitely up there on the priority list. Other factors to consider if you’re thinking about renovating include:
- How long do you plan to live on the premises — are you staying long enough that you reap the benefits and enjoyment of said renovations?
- How long till you retire — will give you a better understanding on how much you can borrow and afford
- How secure is your employment?
- Are you currently close to a school or work — it might be worth renovating as opposed to moving further away
Additional expenses to consider include:
- The cost of getting a development assessed by your local council
- The cost of getting architectural drawings
- Consultation fees for environmental impacts/arborists reports
- Additional costs for heritage listings
- Renting costs if you’re not able to live at home during renovations
- Additional costs caused by poor access
- Additional costs of protecting underground infrastructure and network assets
Before deciding to renovate, take a look at what your property is worth, how much similar properties are in your area, and how much ones that have an additional bedroom or bathroom sell for. This will give you a fair idea on the value your renovation will add to your home equity.
What renovations are eligible for the HomeBuilder grant?
First of all, the renovation contract must be between $150,000 to $750,000. Secondly, the value of your existing property (house and land) must not exceed $1.5 million prior to renovating.
As defined by the Australian Government HomeBuilder FAQ sheet,
Substantial renovations do not necessarily need to involve the removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases. However, it should improve the accessibility or safety or livability of the property.
Examples of renovations that do not qualify for the HomeBuilder grant include:
- Standalone granny flats
- Swimming pools
- Tennis courts
- And structures that are not connected to the property (outdoor spas and saunas, sheds or standalone garages)
In other words, all the renovations that we mentioned at the beginning of this article such as bathroom, kitchen, master bedroom and house extensions are all eligible for the HomeBuilder grant.
If you’re wondering if knock-down rebuilds are considered as “renovations”, yes they are. Knock-down rebuilds are considered as substantial renovations and therefore qualify for HomeBuilder.
Ultimately, it seems like the Government’s HomeBuilder scheme has been aimed at a particular market and unfortunately, may not be of help for people looking to only do smaller renovations. Nor, does it provide any support for the smaller trades/ businesses who rely on renovation jobs of around $10,000 to $15,000. So, who’s truly benefitting from this scheme?
If you’re one fortuitous few with plenty of funds to spend, consider possible long-term savings of modifying your home to be more energy-efficient. Such as secondary glazing for windows, draught-proofing, insulation and solar PV energy, which may be expensive upfront but will save on long-term running costs.
As energy costs continue to increase, a home that’s self-sufficient will be more attractive and valuable.
Considering applying? read our article on how to apply for the grant in each state.
Look at how Diamond Cut Concrete can help you with your residential renovations.