Construction to Help us Re-Build – HomeBuilder Scheme Announced
Some further well received news for our developer and builder community to combat the uncertainty and negativity the Covid-19 pandemic has brought with it. The Federal Government has on the 4th June 2020 announced a $700 million housing package scheme aimed at stimulating the construction sector and keeping builders and tradies gainfully employed while assisting housing affordability.
Under the HomeBuilder scheme, eligible Australians will be given a $25,000.00 grant to build a new home, or commence major renovations of an existing one. Eligibility criteria for the grant are as follows:
- Applicants must be natural persons. The scheme is not available for companies or trusts;
- Applicants cannot earn more than $125,000.00 per year as an individual, or $200,000.00 as a couple, based on tax returns from 2018-19 or later;
- Building contracts entered into have to be dated between 4 June 2020 and 31 December 2020 and must be for either:
- Builds of a new home constituting the applicants’ principal place of residence, where the property value is no more than $750,000.00.
- Substantial renovations of an existing home costing between $150,000.00 and $750,000.00, where the property value is no more than $1.5million.
- Construction must commence within 3 months after the contract date.
To be considered an applicable ‘renovation’, works must improve the accessibility, safety and liveability of the dwelling. For this reason, works to add in or renovate swimming pools, tennis courts, spas, sheds, garages and other structures unconnected to the main dwelling are not included.
Furthermore, builds and renovations must be undertaken by registered or licenced building services/contractors, and must be named as builders on their licences or permits.
The scheme does not apply to investment properties or owners intending on building or renovating without the help of builders.
What does this mean for builders and developers?
The HomeBuilder scheme will likely assist in driving demand for house and land packages within the relevant price point in the short to medium term. While such incentives will be strong marketing points for relevant projects, we urge caution when publicising the availability of the grants and suggest specifically worded conditions be included in contract to have purchasers unequivocally acknowledge that such grants are provided outside of the control of the developer/vendor, are the obligation of the purchaser to obtain on a case by case basis and that the build package or contract is not dependant on such grant being obtained. It remains to be seen how the application process will work and whether ‘pre-approval’ can be obtained by buyers. It also remains unknown (for now) as to how variations to build contracts will be dealt with, specifically where a variation may take the total build outside of the eligibility criteria of the original grant.
Our team are readily available to assist developers and builders impacted by this grant to not only maximize the benefit of the grants but also to address these concerns and protect the interests of their projects.
About Best Hooper – Victoria’s Property, Planning and Land Development Advisory Law Firm
Best Hooper are the oldest and most prominent developer focused law firm in Victoria who have served our community since 1886; through wars, recessions, depressions and pandemics. We are actively advising clients in relation to the COVID-19 outbreak on all property related matters including leasing, disputes, property transactions and planning advices and applications. We are continuously recognised as industry leaders in a variety of publications, including Doyles Guide and Best Lawyers.
If you have any questions about this article or require more information, please contact Giancarlo Romano, (03) 9691 0220 or email@example.com
Giancarlo Romano is a Senior Associate in the Best Hooper Property Team who represents private and corporate landlords and tenants across commercial, retail and residential leasing and all facets of property transactions.