The Australian Government has extended its HomeBuilder scheme to enter into a contract to build, or renovate, by 31 March 2021 for a $15,000 grant.
This is a welcome announcement as property sales have continued to be strong over the 20/21 Summer.
To re-cap, the HomeBuilder scheme will offer eligible Australian citizens grants of $15,000, to put towards building, substantially renovating or purchasing an off the plan/new home. Importantly, the grants must not be used on investment properties or for the construction of swimming pools, tennis courts or garages. Participants must also spend between $150,000 and $750,000 to receive the grant and the value of the property, prior to building, must not exceed $1.5 million.
Whilst those wishing to participate in the scheme need to enter into a building contract before 31 March 2021, construction works can now commence within six months of the contract date, rather than three months as was originally announced in June 2020.
Applications for the HomeBuilder grant are now open and can be lodged via the online portal on the Victorian State Revenue Office’s website, however, careful attention must be paid to the eligibility criteria which has recently been clarified by the Government.
To be eligible for the grant, singles must have a taxable income of less than $125,000 a year and couples, a combined taxable income of less than $200,000 per year. When the scheme was first announced, income assessments were to be based on the 2018-2019 tax year, however, this has now been expanded to alternatively include the 2019-2020 tax year.
Only natural persons, not companies or trusts, can apply for the grant and applicants must be 18 years or older at the time that they sign the building contract. Further, the applicant and the builder must ensure their contractual negotiations with each other are at arm’s length – they must not be related or connected by a special relationship.
Eligibility for the scheme is also based on the applicant’s intention to occupy the property as their principal place of residence for a period of at least six months, commencing immediately after the completion of the construction works. Applicants should keep records confirming the property is being used as a principal place of residence. If circumstances change during the six-month residency period, such as the property is sold or rented, applicants have 14 days to notify the State Revenue Office and pay back the grant.
Finally, applicants must carefully review the supporting documents that are to be included in the application as this will vary depending on whether the intention is to build, renovate or purchase an off the plan dwelling.
If you require further advice on the HomeBuilder scheme, or you’re buying or selling a property, we can assist. Contact our Castlemaine office on 03 5472 1588 or Bendigo office on 03 5434 6666.