Home Builder Grant: How does it work?
- Posted By Pasang Sherpa
The Home Builder grant announced by the government has been acknowledged by all. It is a $25,000 tax free grant provided by the government to the eligible Australian citizens which can be used for building a new home or renovating an existing home.
There are some criteria for Australian citizens to be eligible for the grant. The first and foremost criteria is the applicant must be an Australian citizen. Also, if both partners are applying both of the applicants must be an Australian citizen. The applicants must be 18 years or older. There is also an income cap for the eligibility, singles must be earning $125,000 or less and couples must have combined income less than $200,000 on their 2018/19 tax return or later.
If a home builder is aiming for the home builder grant the cost of building a new home should not exceed $750,000. The threshold amount for renovation is also a maximum of $750,000 but a minimum expense of $150,000 should be made for eligibility. Home renovators should also keep in mind that the value of property being renovated must not exceed $1.5 million.
IS THE GRANT AVAILABLE FOR INVESTORS?
The grant is not accessible for investment purposes. To add on, the grant cannot be utilised for the renovation of investment property. However, eligible second home buyers can access the home builder grant if they are acquiring the property as principle place of residence.
HOW DOES IT WORK?
The Home Builder grant is administered by Revenue NSW. An online portal has been set up by NSW in order to make it easier for online applications. The following website link can be used to apply for the home builder grant. Applicants must be aware to apply for the grant before 31 December, 2020.
Applicants will be needing following documents in order to apply for the grant:
- Proof of identity.
- Copy of contract that is signed and dated by you and the registered or licensed builder.
- Copy of builder’s registration or licence.
- Copy of your 2018-19 tax return to demonstrate income cap eligibility.
- Other documents like council approvals, building contracts, evidence of land value.
If all the criteria has been met the grant amount will be paid by the state or territory. After the commencement of the construction the grant will be paid. Typically, grants are processed via your lender and paid directly to your builder. If you do not have a lender, you can apply directly with your state government. These offices will backdate the Home Builder applications to 4 June 2020 once the National Partnership Agreement is signed.
For renovations, the grant will be paid once renovation starts and you’ve submitted evidence to show progress payments of at least $150,000 of the contract price has been made to the builder.
For off the plan or buying a new home, the grant will be paid once you’ve submitted evidence that the property is registered in your name on the title.
SOURCE:
Revenue, 2020. revenue.nsw.gov.au. [Online]
Available at: https://www.revenue.nsw.gov.au/news-media-releases/covid-19-tax-relief-measures/homebuilder-program
Revenue, 2020. treasury.gov.au. [Online]
Available at: https://treasury.gov.au/sites/default/files/2020-07/HomeBuilder_Frequently_asked_questions.pdf