ScoMo released information about a $700 million housing stimulus package called HomeBuilder, in an attempt to rescue the economy from the spiral of a Covid-19 recession and insure tradies keep busy.
As a first home buyer, does the HomeBuilders Grant Sweet Spot work for you? The Home Builders grant does not equal isolation. This new grant can be used in conjunction with existing grants and exemptions. Yes, they differ from state to state, however, the introduction of this boost could be just what is necessary to give first home buyers what they need to get into the market sooner. This grant is to keep trades going and boost the construction industry. In ACT and NSW the boosts aren’t nearly as high as other states, however, ACT does have an exemption from stamp duty on all properties, and New South Welshman can get up to $35,000.
What’s the Sweet Spot?
The sweet spot for those with limited deposits could be homes between $350,000 – $450,000 where the grants of up to $40,000 can equal up to 10% of the deposit. This could mean the difference of getting into the market or not for some first home buyers. Here is the link for the Commonwealth Home Builders Grant or here. The banks are generally looking for some savings, however, depending on your savings, your purchasing HomeBuilders Grant Sweet Spot could be a lot higher.
A $25,000 Home Builders grant will be for new home builds and refurbs of existing houses but you will only qualify if you meet the following criteria:
- Be an Australian citizen aged 18 years or older and be an individual, not a company or trust.
- Contract Price is $150,000 – $750,000 on a home renovation and previously valued at less than $1.5 million.
- The new home build has to be less than $750,000 (including land value)
- You satisfy a test of income:
- Singles must be earning $125,000 or less based on their 2018/19 tax return or later
- Couples must have a combined income of less than $200,000 based on their tax returns
Also, the works must improve the accessibility, safety and liveability of the dwelling. That’s goodbye to additions that are unconnected to the residence such as tennis courts, outdoor spas and saunas, sheds or garages.
The HomeBuilder grant will be available for any contracts entered into between 4 June 2020 and 31 December 2020.
This new grant is open to owner-occupiers (not just first home buyers), however, First Home Buyers will reap the biggest rewards, with the ability to add HomeBuilder to existing Commonwealth and state based incentives.
What grants are on offer in your state or territory and what could be the benefits?
| South Australia Up to $40,000 |
Commonwealth Home Builder grant = $25,000 A grant of $15,000 is already available for new properties up to $575,000. No Stamp duty concessions for SA properties. |
| Western Australia Up to $55,000 |
Commonwealth Home Builder grant = $25,000 Plus $10,000 grant available for new homes for First Home Buyers, Plus 7th June the WA state government announced it would add home buyers a bonus $20,000. This doesn’t include a first home buyer stamp duty concessions. WA Stamp Duty Concession – Purchase Price $430,000 up to $14,440 |
| Queensland up to $40,000 | Commonwealth Home Builder grant = $25,000 Plus $15,000 grant available for new homes for First Home Buyers, buying or building a new house, unit/townhouse up to $750,000. Plus QLD residents buying a new home are exempt from paying stamp duty on homes costing less than $500,000, and a discounted rate up to $550,000. The Queensland state government is also offering a $5,000 grant for first home buyers building a new house, unit or townhouse in regional Queensland valued at $749,999 or less. QLD Stamp Duty Concession – Purchase Price $500,000 up to $8,750 |
| Victoria – up to $45,000 | Commonwealth Home Builder grant = $25,000 Plus $10,000 grant available for new homes for First Home Buyers, Or $20,000 for new homes built in regional areas up to $750,000 (Contracts signed between1 July 2017 to 30 June 2021) No stamp duty payable on property under $600,000 Discounted stamp duty on properties between $600,000 to $750,000 VIC Stamp Duty Concession – Purchase Price $600,000 up to $31,070 |
| NSW up to $35,000 | Commonwealth Home Builder grant = $25,000 Plus $10,000 grant for new properties less than $600,000 and building contracts worth less than $700,000. New Homes – must be no more than $750,000. No stamp duty payable on property under $650,000, No stamp duty on vacant land under $350,000, Discounted stamp duty on properties between $650,000 to $800,000 Discounted stamp duty on vacant land between $350,000 to $450,000 NSW Stamp Duty Concession – Purchase Price First Home $650,000 up to $24,862 |
| ACT up to $25,000 | Commonwealth Home Builder grant = $25,000 No additional ACT-based First Home Buyers Grant. All ACT first-home buyers are exempt from paying stamp duty if their income is less than $160,000 as a couple, however, differs if you have children, here are the income bands. |
| Northern Territory – up to $55,000 | Commonwealth Home Builder grant = $25,000 Plus $10,000 grant available for any new homes for First Home Buyers. Plus, a $20,000 BuildBonus grant of $20,000 (for the first 600 applications). NT Also have various other schemes and offers such as: Discounted stamp duty up to $18,601 buying an established home, a new home or land to build a new home. A scheme that gives them up to $2000 towards the cost of household goods. |
| Tasmania – $45,000 | Commonwealth Home Builder grant = $25,000 Plus $20,000 grant available for any new homes for First Home Buyers. TAS Stamp Duty Concession – Purchase Price established homes only up to $400,000 up to $6,998 (TAS government will provide a 50 per cent concession on property transfer duty for first home buyers of established homes with a property value of $400 000 or lower) Contracts between 7 February 2018 and 30 June 2022 inclusive. |
Are you currently utilising any of these schemes? If so yes, they can be accessed in conjunction with these Grants and concessions.
- First Home Super Saver Scheme (FHSS)
This scheme allows you to save up to $30,000 for your first home inside your super fund.
The First Home Super Saver Scheme (FHSSS) helps boost savings for a first home by allowing them to build
a deposit inside superannuation, giving them a tax cut. These contributions, along with deemed
earnings, can be withdrawn for a home deposit from 1 July 2018. - First Home Loan Deposit Schemes
This guarantees mortgages for first home buyers who have as little as a 5% deposit. The Australian Government provides a guarantee for the remaining 15%, which effectively helps you buy sooner without paying mortgage insurance premiums, which can definitely become costly.
In conclusion, it is important to know what your options are, these vary state by state. This HomeBuilders Grant Sweet Spot means more to you now if you are a first home buyer and able to purchase a new home or construct a new property. This may just be the boost you need to get into that first home.
Help is here if you are looking for how this could give you a boost, feel free to chat. We’re here to give you the finance confidence and get you informed.