Stepping up to address the declining economy caused by this pandemic, the federal government of Australia announced a special housing grant for new homes and renovations called the HomeBuilder program.
The Federal Government have this week announced yet another economic recovery incentive to help Australia pull through what is now officially a recession. We’ve have a look into how this incentive can help small businesses and who can take advantage of the scheme.
This program is expected to help both homeowners and the construction industry to help recover from the recession. According to Denita Wawn, CEO of Master Builders Australia, “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”.
Prime Minister Scott Morrison mentioned that the program offers $25,000 to support those Australians whose dream was to build their home or to do that big renovation. Aside from helping the homeowners, Morrison said that “it is also about creating jobs and helping support the more than one million workers in the sector across the country.”
With this, small businesses in construction such as builders, painters, framing carpenters, plumbers and electricians will get their jobs back.
Who is eligible for the HomeBuilder program?
Based on the government’s estimate of 27,000 grants which is expected to cost around $680 million, they made sure that those only who are eligible with these standards will make it on the list.
To be granted the $25k, you must be:
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An Australian citizen aged 18-year old or more.
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An individual, not a trust or a company.
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On an income of $125,000 a year for singles and less than $200,000 a year for couples (based on your last tax return, which cannot be earlier than 2018/19).
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Spending between $150,000 and $750,000 on a renovation for a home that has been previously valued at less than $1.5 million.
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Building a new home worth less than $750,000 which includes the land value.
All kinds of dwelling types such as a house, an apartment, a house and land package, off the plan, etc, are eligible for the scheme. It is offered for contracts entered into between June 4, 2020, and December 21, 2020. The construction must also begin within three months of the contract date to be eligible.
Ineligibility factors for the $25K grant
After Australia’s declaration of recession in 29 years, the government had been looking into a new approach that will help save the declining economy so they came up with the $25,000-worth, HomeBuilder program. But, to make sure that only those who badly need it must get the grant, an income test will take place. This is also to ensure that millionaires and people minimising their taxable income through trusts cannot claim the cash.
As it is not for everyone, it will not apply to the following:
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To owner-builders or those who are planning to build a new home or renovate an existing home as an investment property.
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Additions to a property that are not connected to the home such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages.
A small step towards economic recovery
As countries around the world have been suffering from the pandemic, the Australian government’s move to slowly rebuild the economy by supporting the different sectors will eventually bear fruit.
“We’ve gone from the big broad strokes of JobKeeper and JobSeeker but as time goes on we’ll be able to narrow it in and focus on those sectors which need longer-term support,” Morrison told 2GB this week, noting the entertainment and film industries were two others currently on the table. He also mentioned that “HomeBuilder would save jobs at a time when the industry was facing extreme uncertainty”.
Treasurer Josh Frydenberg said that “the construction sector is the number one industry covered by the Government’s JobKeeper program with more than a million Australians employed across the sector,’’ further strengthening the benefits of the new government program.
