The Federal Government has unveiled its HomeBuilder package, offering $25,000 for people to upgrade or build their homes — but access to the scheme's free money won't come cheap.
The eligibility criteria will rule out most, with the Government expecting about 27,000 homeowners or builders to access the scheme.
For comparison, there are 7.7 million private dwellings in Australia, according to the Australian Bureau of Statistics.
The scheme's primary goal is to supply work for the residential construction sector, but some people planning a big project are set to benefit.
Here are the conditions you'll need to meet to access HomeBuilder, and how the scheme will work.
Am I eligible?
On a basic level:
- You need to be an adult Australian citizen with a taxable income less than $125,000 a year. If you live with your partner, your combined income has to be less than $200,000 per year
- Before the end of the year, you need to enter a contract to renovate or build your main place of residence, with construction to begin within three months of the contract date (no investment properties)
- For renovations, you need to spend between $150,000 and $750,000 of your own money, and the house you're renovating must be valued at less than $1.5 million prior to renovations
- Renovations need to improve the accessibility, safety or liveability of the home and don't include external work like swimming pools, tennis courts and sheds
- For new builds, the total value of the completed home needs to be less than $750,000, including land
Should you meet the criteria, there is still a handful of requirements on the contract side.
For instance, your contract needs to be negotiated at a fair market price, to prevent people from asking their builder to puff up the costs so you can access the grant.
You can't ask your favourite uncle to do the work, with the scheme requiring you have no special relationship with your contractor, such as being related.
All works need to be conducted by a registered or licensed builder, depending on your state or territory.
If you have concerns your builder is increasing prices in light of these grants, you can ask them to demonstrate the cost is the same or lower than a comparable project in July 2019.
$150,000 seems like a lot...
It's fair to say you'll need to do more than a cosmetic bathroom renovation to qualify for the grant.
According to the Housing Industry Association (HIA), the average cost of a bathroom renovation in 2018-19 was $19,553, while a new kitchen would set the average household back $26,280.
Even combined, those projects wouldn't cost half of what the Government is encouraging renovators to spend.
But the HIA's Graham Wolfe said many renovations would be large enough to qualify.
"The thresholds provide for renovation works over $150,000 [and] our initial estimates suggest there would be in the order of 7,000 to 10,000 over the 6-month period of the package," Mr Wolfe said.
The goal of the program is not so much to get Australians' kitchens and bathrooms looking schmick as it is to keep tradies busy through a projected "valley of death" period over the back half of the year.
Mr Wolfe said he believed the program would help.
But Opposition Leader Anthony Albanese suggested that to meet the criteria, a bathroom renovation would require a "gold bath and pearl taps".
"There aren't too many battlers out there who have a lazy $150,000, who will see this announcement today and say, 'I'm going to go between now and December 31 and sign a contract for a project which is worth more than $150,000'," he said.
Housing Minister Michael Sukkar said the minimum spend of $150,000 would make sure that renovators have "skin in the game" when it comes to works on their homes.
More on offer than just HomeBuilder
Provided you have the money and meet the criteria, you can apply directly to your state or territory's revenue office for the new grant.
The Government says the states and territories will wear the cost of administering the program through existing systems, and the package can be paired with other benefits offered at the state and territory level.
Earlier today, Tasmania and the ACT announced concessions for first home builders and people purchasing residential land, respectively.
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2020-06-04 05:02:27Z
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