Final touches on $25,000 HomeBuilder scheme announced

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The “crucial final touches” on the federal government’s $25,000 HomeBuilder scheme have been revealed. Will your build be eligible?

When the federal government announced its $25,000 HomeBuilder scheme in early June the immediate reaction from many was ‘you little beauty’, quickly followed by, ‘wait… will my project even be eligible?’

It’s a question that’s lingered for a few weeks, however we now have more clarity.

And the good news is that the Housing Industry Association (HIA) – the construction industry’s peak national body – has welcomed what it’s labelled the federal government’s “crucial final touches” on the scheme.

So what are these final touches? Let’s take a look.

More wiggle room for finance and building approvals

It looks as though homeowners now have a little more wiggle room when it comes to having their finance, building proposals and other legal requirements approved.

One of the biggest criticisms of the scheme when it was first announced was that homeowners needed to get everything approved and construction commenced within a fixed three-month timeframe.

Now, the scheme’s official FAQ on the Treasury website still states that construction must commence within three months of the contract date.

However, it now adds a provision for cases where approvals are unexpectedly delayed.

“States may exercise discretion where commencement is delayed beyond three months from the contract date due to unforeseen factors outside the control of the parties to the contract. For example, delays in building approvals,” Treasury states.

Here’s what the HIA adds on the update: “Recognising that a fixed three-month timeframe to commence building work did not reflect how dependent home builders are on other players, like the banks, the councils and building certifiers, is extremely important.”

Off-the-plan apartments and townhouses

Off-the-plan apartments and townhouses that don’t exceed $750,000 are eligible for HomeBuilder.

But what was doing a lot of people’s heads in was the timing of it all: did it simply need to be an off-the-plan purchase? Could construction have already been underway?

Well, we now have some clarification.

To qualify for the scheme the first box to tick off is that you need to sign the contract to buy the off-the-plan dwelling on or after 4 June 2020, and on or before 31 December 2020.

The second box is that construction needs to commence on or after 4 June 2020, and no later than three months after the contract is signed.

If, however, you sign the contract to buy the dwelling after 4 June 2020, but construction commenced before 4 June 2020, then the home won’t qualify for HomeBuilder.

Now, as mentioned in the above section, keep in mind that states and territories may exercise discretion where the commencement of construction is delayed beyond three months and it’s outside your control.

However, you’ll definitely want to ensure you do your due diligence on the project’s estimated construction date to give yourself the best possible chance of receiving the $25,000 grant.

Payments expected to be aligned with first home owner grants

Last, but certainly not least, Treasury released more information on the timing of the $25,000 payments.

“It is expected that, where possible, states and territories will align the HomeBuilder application processes with existing processes for first home owner grants (or similar),” Treasury states.

Basically, this means the ball is now in the court of state and territory revenue offices, which will soon outline the final details of how applicants can apply as well as the timing of the payments.

And the good news is the HIA is optimistic.

“HIA has been working closely with state and territory revenue offices and we look forward to receiving these details soon, which will assist home buyers and builders to begin taking full advantage of the grant,” the HIA said.

Get in touch

As mentioned above, while the federal government has provided its final touches on the scheme, we’re still waiting for each state and territory to confirm their own final touches.

But if it looks like you’ve ticked the above boxes and you want to start looking at financing options for your HomeBuilder project, please get in touch.

As with most things in life, the more organised you are, the better!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Best Aussie suburbs to find a "renovator's dream"

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Most of us have at one time dreamed of discovering a hidden little gem and renovating it into the most enviable house on the street. With the $25,000 HomeBuilder grant, those dreams are closer to becoming a reality for many. But where to look?

Well, recent realestate.com.au data might have revealed the answer.

They’ve analysed all the listings in their database for keywords such as “renovate”, “renovation” and “STCA” (subject to council approval), and then ranked each suburb on the percentage of properties containing those keywords.

So with the federal government’s HomeBuilder scheme providing eligible homeowners a $25,000 grant to substantially renovate their homes, the below suburbs could be a good starting point for your search.

The top five “renovator’s dream” suburbs in each state

NSW: Lethbridge Park 2770 (70%), North St Marys 2760 (67%), Hebersham 2770 (64%), Oakhurst 2761 (62%), Kandos 2848 (59%).

VIC: Frankston North 3200 (70%), Mount Dandenong 3767 (50%), Canterbury 3126 (47%), Ivanhoe East 3079 (45%), Doveton 3177 (44%).

QLD: Sadliers Crossing 4305 (58%), Petrie Terrace 4000 (53%), Newtown 4305 (50%), Herston 4006 (50%), Grange 4051 (47%).

WA: Glen Forrest 6071 (50%), Northcliffe 6262 (47%), North Lake 6163 (42%), Greenmount 6056 (41%), Greenwood 6024 (40%).

SA: Angaston 5353 (50%), Happy Valley 5159 (50%), Hawthorndene 5051 (42%), Aberfoyle Park 5159 (41%), Panorama 5041 (40%).

TAS: Battery Point 7004 (50%), Triabunna 7190 (46%), Moonah 7009 (46%), West Moonah 7009 (38%), Dynnyrne 7005 (36%).

ACT: Wanniassa 2903 (46%), Farrer 2607 (42%),  Evatt 2617 (40%), Curtin 2605 (37%), Mawson 2607 (32%).

NT: Driver NT 0830 (39%), Woodroffe 0830 (38%), Fannie Bay 0820 (33%), Rapid Creek 0810 (32%), Moulden 0830 (31%).

Keen to turn your reno dream into a reality?

Day-dreaming about renovating is one thing; financing it and actually making it happen is another. Fortunately, that’s where we can help out.

So if you’d like help obtaining finance to pay for that reno project you’ve got your eye on, get in touch with us today – we’re here to help make your reno dream a reality.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

So, who’s eligible for the $25,000 HomeBuilder scheme?

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You might have heard that the federal government will give eligible Australians $25,000 to build or substantially renovate homes as part of the new HomeBuilder scheme. Today we’ll look at who exactly can qualify for the initiative.

The $680 million program, which is part of the federal government’s economic response to the coronavirus pandemic, aims to support more than 1 million builders, painters, plumbers and electricians across the country.

It’s also a win for many Australians wanting to buy a new home or begin an overdue reno, as the $25,000 grants are non-taxable and will complement existing state and territory first home owner grant programs, stamp duty concessions and other federal schemes.

So, without further ado let’s see whether or not you might be eligible.

Eligibility details

To access HomeBuilder, owner-occupiers must:

– be an individual, not a company or trust;

– be aged 18 years or older;

– be an Australian citizen; and

– have an income of less than $125,000 per annum for an individual applicant, or $200,000 for a couple (income caps are based on 2018/19 tax returns or later).

Additionally, you must enter into a building contract between 4 June 2020 and 31 December 2020 to either:

– build a new home as a principal place of residence valued up to $750,000 (including land); or

– substantially renovate your existing home as a principal place of residence, with renovations valued at between $150,000 and $750,000, and with the dwelling not valued at more than $1.5 million before the renovation.

Construction must be contracted to commence within three months of the contract date.

Other eligibility details

All dwelling types – including houses, apartments, house and land packages and off-the-plan dwellings – are eligible.

However, HomeBuilder cannot be used for additions that are unconnected to the principal place of residence, such as swimming pools, tennis courts, outdoor spas and saunas, and detached sheds or garages.

HomeBuilder is also not available for investment properties or to owner-builders.

A few final important details

The $25,000 grant will go directly to the applicant, not the contractors.

Renovations or building work must be undertaken by a registered or licenced building service contractor.

To help protect against inflated quotes and pricings, the registered or licensed builder must be able to demonstrate that the contract price for the new build or renovation is no higher than the cost of comparable works done back in July 2019.

To find out more about what the HomeBuilder grant might mean for you, check out the case studies at the bottom of this Treasury HomeBuilder factsheet.

They run through scenarios involving a house and land package, a renovation, an off-the-plan apartment, knocking down and rebuilding a house, and building on a vacant block.

Get in touch

So, that covers the scheme’s eligibility details. If you’ve ticked the above boxes, the next thing to tackle is financing the project.

And that’s where we can help.

If you’d like help obtaining finance to pay for the new home or reno of your dreams, get in touch with us today – we’re here to help make your HomeBuilder dreams a reality.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Bank loyalty can cost existing borrowers: ACCC report

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Loyalty is an admiral trait when it comes to our friends, family and loved ones. But if you’re extending that virtue to the banks, then there’s a good chance it’s costing you thousands of dollars.

That’s the takeout from the ACCC’s latest Home Loan Price Inquiry interim report.

It shows that although interest rates charged by the big four banks on home loans fell during 2019, existing customers were stung by higher interest rates compared to newer customers, in no small part due to a lack of price transparency.

Price comparison confusion

The report found that the big banks’ home loan pricing practices make it pretty darn difficult for borrowers to compare different mortgage products.

That’s because the headline rates you see when you do your initial research don’t accurately reflect the price most big four bank customers actually pay for their home loans.

Indeed, the ACCC found there’s little difference in the headline variable rates of the big four banks, which on face value quickly deters borrowers from switching it up and refinancing to a lower rate.

But in reality, close to 90% of big four banks home loan customers receive discounts off the headline variable rate. And many of those receive non-transparent discretionary discounts.

So how big are the discounts?

We’re talking pretty big differences here, especially compared to advertised rates.

For example, a borrower with an average-sized principal and interest mortgage of $386,000 could save about $5000 on interest payments in the first year if they went from having no discount to receiving the big four banks’ average discount of 128 basis points.

The report also found the big four bank customers whose principal and interest loans were greater than five years old were paying an average 40 basis points more than those with similar new loans.

That means for a loan of around $200,000 (the average size of a loan more than five years old), a borrower who refinances could save around $850 in interest in the first year.

So what’s the next step?

That’s easy: you owe the bank nothing – in terms of loyalty – so it’s time to see what your options are.

And we can help because we know what rates lenders are really offering – despite what their “headline” rates say.

So if you’re keen to find ways to save interest on your home loan, please get in touch. We’re happy to walk you through your refinancing options any time.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

How to increase your property’s value by up to 10%

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Properties with high energy-efficiency ratings typically sell for up to 10% more, a review of international research shows.

The review, which was conducted by the University of Wollongong, compiled research undertaken in 14 countries and included data from the Australian Capital Territory (ACT), which is the only Australian jurisdiction to require that sellers disclose the energy-efficiency rating of their home.

What were the review findings?

In the ACT, the review found there was a 9.4% price premium for a house with a 7-star NatHERS rating (see below) compared to a house with 3-star NatHERS rating, and a 2.4% premium for a 6-star house.

If you consider that the ACT has a median house price of $773,635, that equates to potential price premiums of $72,721 (7-star) and $18,500 (6-star).

This latest review backs up similar research findings conducted by the University of Western Sydney in the commercial building sector, in which disclosing energy ratings is standard practice across Australia.

“Everybody wants an energy-efficient home. After all, an energy-efficient home is comfortable to live in, without large energy bills,” says Dr Daniel Daly, a research fellow at the Sustainable Buildings Research Centre, University of Wollongong.

“These can be important factors for prospective home-owners or renters.”

How can I improve my property’s NatHERS rating?

The Nationwide House Energy Rating Scheme (NatHERS) is a star rating system out of ten that rates the energy efficiency of a home, based on its design.

The government’s Your Home website is a great starting point when it comes to making your property more environmentally sustainable.

It includes information and tips on how to include more energy-saving features in your home, which may include solar panels, insulation, double-glazed windows, draught sealing, batteries, and rainwater tanks.

Need finance for your energy-efficient property project?

There are many advantages to owning a property with a high NatHERS rating.

So if you’re looking to build, renovate or simply upgrade your property, then get in touch. We’d love to talk to you about your financing options.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.