The Australian government has announced a HomeBuilder package that offers $25,000 for people to build or renovate their homes—however, there is a strict criteria to meet before being given access to the scheme’s money. The Government predicts around 27 000 homeowners will want to access this scheme. According to the latest stats from the Australian Bureau of Statistics there are 7.7 million private dwellings in the country. The primary purpose of this scheme is to try and get in work for the residential construction sector and inspire some confidence in homeowners to start investing into their property. However, before you start designing your new home, it’s important to check the eligibility criteria. On a base level you need:
- to be an Australian citizen with an annually taxable income of less than $125,000 a year, or a combined taxable income of $200,000 if with a partner
- enter into a contract to build or renovate your main residence (no investment property) before the end of year and start construction within three months of the contract date
- to spend between $150,000 and $750,000 of your own money and the property being renovated needs to be valued at $1.5 million prior to renovations
- to ensure renovations are to improve accessibility, liveability or safety, which means external work like swimming pools are not accepted for the scheme
- to ensure your new builds are valued at less than $750,000 when completed, including the land
What to do if you meet the criteria?
So, you’ve had a look at the criteria and have found that your construction plans fit within scope. Unfortunately, that’s not the end of it. There are still some caveats around the contract side of things and how you go about starting your construction process. For the first part you are not allowed to have a special relationship or familial ties with your contractors. You also need to ensure that all work is conducted by workers with the relevant builders license. On top of that, you should ensure that your contract is negotiated at a fair market price. This is to prevent anyone from hiking up prices to meet costs for accessing the grant. A national partnership agreement will be drawn up to which all states and territories will be individual signatories.
According to Housing Minister Michael Sukkar, there is around 8000 households who have registered an interest in the scheme as of 8th June 2020. More than half of these are from Victoria and Queensland. Hopefully, with a high interested in the scheme, it will be able to meets its goal of helping to boost the construction industry post COVID-19.
What does this mean for tradies and construction workers?
This scheme is set to ensure tradies and construction workers are not left behind in the aftermath of this pandemic as it is seen to be one of the industries that could feel longer-term impacts of COVID-19. While work in the pipeline was getting there, there seemed to be a lag in new jobs and contracts in the construction industry. The minimum spend of this scheme is said to be placed as a measure to ensure that there will be jobs retained in this industry. The ACT has shown projections of 1,890 jobs being created due to this scheme and 493 new properties being built across the territory. Builders will now need to be prepared to take on jobs coming in because of this scheme and ensure they are aware of all the criteria to ensure the contract meets necessary requirements. For those in the industry who have been worried about work, now is a good time to prepare yourself to ensure you are a top choice for these incoming construction projects. Look into recognising your experience through RPL and keep up-to-date with how this scheme is progressing in order to gain the trust of homeowners looking to build and renovate.
Make the most out of this scheme
If you have been planning a new home build or renovation for a while, this is the perfect opportunity to get the ball rolling. However, you don’t want to jump in headfirst and apply for the scheme. Take some time to do some planning and research beforehand. Start by setting a realistic budget, keeping in mind the criteria to access the scheme, get a rough idea of the areas in your home you want renovate or a rough build design. Then enlist the help and support of the contractor to help outline the terms that will best ensure you get the home you’ve always wanted and still meet all the necessary criteria to receive the monetary support from this scheme.