HomeBuilder Grant Explained – Issues for Strata Properties

By June 12, 2020Property

What is the HomeBuilder scheme?

The $688-million HomeBuilder package was launched to drive economic activity across the residential construction sector.

The HomeBuilder package will offer $25,000 grants to Australians who wish to build a new house up to $750,000 or undertake a major renovation that costs a minimum of $150,000.

The renovations need to be valued between $150,000 and $750,000, and the dwelling value cannot exceed $1.5 million before the new work commences.

Who Is Eligible?

To be eligible for the scheme, you need to be an owner-occupier, building or renovating a home and meet the following criteria:

— You are an Australian citizen aged 18 or over, you can’t access it through a company or trust
— Your annual income needs to be less than $125,000 for individual applicants, or less than $200,000 for a couple based on your 2018-19 tax returns or later.

What can be done? Does my project qualify?

For renovations:

— If you are renovating, you need to be spending more than $150,000.
— If you are renovating an existing property it needs to be valued at less than the national price cap of $1.5 million.

The works must be completed by a currently registered or licensed builder – so you will not be able to get a friend or individually employ tradespeople to complete the renovations

The building works must improve the liveability, accessibility or safety of your home. Things such as pools, outdoor spas and saunas, tennis courts, sheds or garages are not eligible for the grant.

For new homes:

— If you are building a new home, it needs to be worth less than the national price cap of $750,000.

Those looking to build a new home as an investment property or renovate an existing investment property are not eligible.

Can you buy off the plan with HomeBuilder?

You can buy off the plan provided you meet the income criteria, meet the spending requirement and the new or existing home falls under the national price cap.

How can I access HomeBuilder?

To be eligible for the $25,000 grant you must enter into a building contract between June 4, 2020 and December 31, 2020.

You need to contact the relevant authority in the state or territory, on when and how to apply.

You can apply in the state you live or plan to live in when it signs the National Partnership Agreement with the Federal Government.

The relevant authority will pay you the grant, as long as you meet the eligibility criteria. The acceptance date of applications will be backdated to June 4.

What documents will I need?

To apply you will need the following:

— Proof of identity.
— A copy of the contract dated and signed by the applicant and the nominated registered or licensed builder.
— A copy of your builder’s registration or license, depending on state or territory requirements.
— A copy of your 2018-19 tax return or later to illustrate your eligibility under the income cap.
— Documents such as council development approvals, building contracts, occupation certificates and evidence of land value.

Can I combine HomeBuilder with other Government grants?

Yes you can.

Queensland owner/occupiers looking to receive the grant may also be able to access:

• State first homeowner’s grant: $15,000
• Commonwealth first Home Loan Deposit Scheme: Up to $10,000

Grants only apply for homes up to a value of $750,000.

For more information go to the Queensland Government’s first homeowner grant website.

Strata Property Issues

Renovating in a body corporate: 

The HomeBuilder grant is available to strata property owners wishing to undertake renovations that cost a minimum of $150,000.

However, before you start work on that new bathroom or kitchen, strata property owners need to understand their rights and responsibilities in regard to renovating their lot.

Many body corporates will have similar by-laws in relation to “alterations to a lot”. The by-laws generally require an owner to submit a written request to the body corporate for approval.

Always check the by-laws in your strata scheme for any mention of needing to seek permission for improvements or renovations and consider whether your changes are structural or could affect common property.

Improvements such as putting in a hard floor (timber or tiling) is often subject to by-laws, and realistically any renovations exceeding costs of $150,000 will most likely need approval.

If you are unsure about the need to apply for approval you should contact your building or body corporate manager.

In any case you should also notify the committee and other residents to notify them of potential noise issues during renovations and the ongoing presence (including parking or access required) of tradespeople on the property.

All substantial changes or upgrades to a lot or to the common property should be recorded for insurance purposes.

Proper communication that keeps everyone up-to-date and informed will promote greater cooperation between resident and ultimately a stronger and happier strata community

For more information of renovations in a body corporate click here

Buying a New Property:

This funding also includes the purchasing of brand new off-the-plan properties; however, the HomeBuilder scheme has some serious caveats for people looking to buy new apartments or townhouses.

The Urban Development Institute of Australia has warned that “the fine print to the federal government stimulus package could catch apartment and townhouse buyers short and are calling on the state government to take further action.”

Chief executive Danni Hunter said a requirement for applicants to sign a building contract to access the funds meant that unless the developer of a townhouse or apartment project was also the builder, buyers might not meet the requirement.

It is common for developers to contract with their buyers and builder separately.

The program’s end of the year deadline also put apartment and townhouse developments at a disadvantage, with many requiring longer than six months to obtain enough sales to sign a building contract.

 

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