The housing industry has received some welcome news this week with the announcement of the HomeBuilder scheme. The government is offering tax-free grants of $25,000 to renovate your home or build a new house.
The impact of COVID-19 has made the prospect of committing to a renovation or building a new home daunting for many. This grant, combined with the current record low interest rates, is an excellent opportunity if you’ve been thinking about home improvements. So, what do you need to know?
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Is everyone building or renovating eligible?
No. You need to be an Australian citizen aged 18 years or older. The grant is not available to companies or trusts. Applicants must earn less than $125,000 (or earn less than $200,000 as a couple).
The grants are available for renovation works that cost between $150,000 and $750,000 and for new homes valued at less than $750,000. The purpose of the renovation must be to improve the ‘livability’ of your home, which means ‘nice-to-haves’ like swimming pools or garages don’t meet the criteria.
The house being renovated must not be valued at more than $1.5 million prior to the renovations. An independent valuation is required to verify the value for the Office of State Revenue in your state. This is where we can help. We’ve already fielded multiple calls from clients needing a valuation to satisfy the eligibility criteria.
The property must also be your primary place of residence, which rules out investment properties.
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Ok, I meet the criteria. What now?
Only registered builders who held their license before 4 June 2020 (the start date of the grant) can do the work. Builders must not be related to the home-owner and must offer the work at market value.
First, you pay your licensed builder the initial instalment for starting the work. You then apply to your state or territory office for the grant, providing evidence the property is less than $1.5 million (or less than $750,000 if building a new home).
The $25,000 will be transferred directly into your bank account once it has been confirmed that all criteria have been met.
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Can I apply any time?
The scheme lasts from 4 June 2020 until 31 December 2020. We recommend that if you’re thinking of applying, you start the process moving as soon as possible. Drawing up plans, choosing the fixtures, finding a builder and entering into a building contract can take longer than you think. Construction must be contracted to commence within three months of the contract date.
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How WBP Group can help (Because we can always help!)
To claim the $25,000 grant, an independent valuation is required to prove your existing house is worth less than $1.5million prior to the renovation. This is where we can help. Call our friendly team on 1300 302 581 and we’ll step you through the process for ordering your valuation to meet the Office of State Revenue guidelines. Alternatively, email [email protected] with your enquiry.
When renovating, it’s important to get independent advice to confirm you are not paying too much or overcapitalising for the area. At WBP Group we can provide an ‘all in one valuation’ with a current figure to meet the Office of State Revenue guidelines and an ‘On Completion’ valuation. This ensures you meet the HomeBuilder requirements and that you are not paying too much or overcapitalising for the area.
Now you know what your property is worth when your renovations are complete. You have peace of mind, weighing up the cost of improving your kitchen, bathrooms and living area with the final value of your property and the benefit of the HomeBuilder scheme. This makes the process as efficient, seamless and transparent as possible.
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The process
You’ve been thinking about renovating for the last few months. You read up about the grant and decide now is the time. In August 2020 you enter into a contract to renovate your kitchen, bathrooms and living area. The renovations will cost $350,000. You obtain an independent valuation of your home from WBP Group and the property values at $950,000.
At the time of the independent valuation, you also arrange an On Completion Valuation, so you know what the property is worth when the renovations are complete.
You pay the builder the first instalment in September 2020. You apply directly to the Office of State Revenue in your state or territory. The office checks your eligibility criteria, including your valuation. You meet the criteria and $25,000 is deposited into your bank account. You start planning your first dinner party once your kitchen is completed. Farewell cramped kitchen island and hello new splashback.
Contact us to find out more about our valuation process and whether your property meets the scheme’s requirements.
