Today’s announcement by the Federal Government is great news for people looking to take advantage of the “HomeBuilder Scheme”.
The scheme, aimed at stimulating the building industry and offering eligible Australians $25,000 to build a new home or renovate their homes, was announced this week. You can find out more by downloading the Government’s HomeBuilder Fact Sheet and the HomeBuilder – Frequently Asked Questions.
There are a range of criteria to be met, but the grant is offered to people who have a maximum income of $125,000 (or $200,000 for a couple) who enter into a building contract between 4 June and 31 December 2020.
The grant can be used to build a new home (where the property value (house and land) does not exceed $750,000) or substantially renovate an existing home (where the renovation contract is between $150,000 and $750,000, and the value of the existing property doesn’t exceed $1.5 million).
When considering if the grant is the right opportunity for you, there are a couple of considerations:
- Not all banks are equipped with a good construction/renovation department, so it’s important you speak to your broker to find the best loan options for a new build or renovation.
- While the grant is a great boost, you still need to fund the remaining costs – and need to consider the best way to do that to suit your lifestyle and financial goals. Whether it’s refinancing, redrawing on your current mortgage or establishing a line of credit you need to make sure the path chosen is one that suits your short-term and long-term needs.
- If you’re looking to renovate and have an existing fixed interest mortgage, you’ll need to start a new loan for the renovation (better known as a split loan).
- It’s important to read the fine print and align yourself with a broker that can help you through the process of renovating / building.
- Make sure you plan well. You need to understand your budget, know what you can afford and stay within your budget.
- You will need a formal licensed build contract for bank lending purposes, and we recommend speaking to trusted builders such as Planbuild Homes to discuss your new build or renovation needs.
When you understand your budget and your financial capability to fund the rest of the project, and you plan a build or renovation that is practical, realistic and with a view to the future, a grant of $25,000 is a great opportunity.