The full details of the Morrison Government's highly anticipated new HomeBuilder grant have been revealed.
It has been revealed the $25,000 HomeBuilder grant for new home builds and renovations will commence from midnight tonight.
To be eligible for the HomeBuilder scheme, you must:
- Be an Australian citizen aged 18 years or older and be an individual, not a company or trust.
- Be on an income of less than $200,000 for couples, and $125,000 for singles.
- Be spending between $150,000 and $750,000 on a renovation for a home that has been previously valued at less than $1.5 million.
- Be building a new home worth less than $750,000 (this includes land value).
Crucially, the tax-free grant will apply to all owner-occupiers - not just first home buyers.
All dwelling types (house, apartment, house and land package, off the plan, etc) will be eligible under the HomeBuilder scheme.
The scheme will not apply to owner-builders or those who are planning to build a new home or renovate an existing home as an investment property.
Looking to build a new home? The table below features construction home loans with some of the lowest variable interest rates on the market.
The grant also cannot be used for additions to the property that are not connected to the home, such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages.
The grant will be offered for contracts entered into between 4 June 2020 and 31 December 2020. Construction must be contracted to begin within three months of the contract date to be eligible.
The program will be uncapped but the government expects it will cost $680 million, which roughly equates to around 27,000 grants.
HomeBuilder complements existing state and territory First Home Owner Grant programs, stamp duty concessions and other grant schemes, as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.
Prime Minister Scott Morrison said the scheme aims to spark a 'tradie-led' recovery to help spark the economy, which has just entered its first recession in 29 years.
“Our JobMaker program is backing a tradie-led recovery to help spark the economy as Australia emerges from the effects of COVID-19,” Prime Minister Scott Morrison said.
“If you’ve been putting off that renovation or new build, the extra $25,000 we’re putting on the table along with record low interest rates means now’s the time to do it.
“This investment isn’t just about helping Australians bring their dream home to life, it’s about creating jobs and helping support the more than one million workers in the sector including builders, painters, plumbers and electricians across the country.”
Master Builders Australia welcomed the news, saying that it will provide a massive relief to thousands of tradies around the country.
“HomeBuilder will be a lifeline for an industry facing a valley of death in the coming months. It will mean more new homes, more small businesses and jobs are protected and provide a stronger bridge to economic recovery for our country,” Denita Wawn, CEO of Master Builders Australia said.
“Based on the Government’s estimated 27,000 grants, we think the scheme will be used for $10 billion in building activity, supporting the viability of 368,000 small builders and tradies – the businesses which employ 800,000 people in communities around Australia.
“The lag effect of building activity means that HomeBuilder comes just in time for builders and tradies staring out at a valley of death with forward work for the next 6 -12 months fast evaporating."
Tasmanian government increases grant
The Tasmanian state government has topped up the Morrison government's $25,000 HomeBuilder grant with an extra $20,000.
"This will be open for the next six months from today and I am so very pleased that the Federal Government are making a $25,000 injection as well, meaning that there will be for those who qualify, $45,000 available if you're going to build a home in Tasmania," Tasmanian Premier Peter Gutwein said.
"That $45,000, you'll need to sign up to a contract from today and before the end of December, you will need to be able to begin construction within three months and then you'll have two years to complete that construction.
"There has never been a better time to build a house in Tasmania ever."
The state government will also commit $100,000 to deliver an additional 1,000 new social houses.
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.
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