THE Morrison government will provide grants of up $25,000 for eligible homeowners to build or renovate between June and December, which is expected to give a shot in the arm to the building and construction sector.
The $688 million HomeBuilder scheme is uncapped, and applicants need to meet a number of conditions including;
- singles earning less than $125,000 and couples on a combined income of under $200,000;
- if they are building a new home, it must be worth less than $750,000 including the land;
- if they are planning to renovate an existing property, it must worth less than $1.5 million;
- and they must spend more than $150,000 and less than $750,000 on the renovations.
The HomeBuilder scheme is not available for investment properties and owner-builders.
The building contracts need to be executed between 4 June and 31 December 2020 and work must start within three months of the contract date.
The grants can be used for kitchen and bathroom renovations carried out by licensed contractors, but cannot be for used additions such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages.
Prime Minister Scott Morrison said, “If you’ve been putting off that renovation or new build, the extra $25,000 we’re putting on the table along with record low interest rates means now’s the time to do it.
“This investment isn’t just about helping Australians bring their dream home to life, it’s about creating jobs and helping support the more than one million workers in the sector including builders, painters, plumbers and electricians across the country,” he added.
Treasurer Josh Frydenberg predicts the scheme would support 140,000 direct jobs and another 1,000,000 indirectly.
Frydenberg said with dwelling investment expected to decline by around 20% through the June quarter, the program will support residential construction activity and jobs at a time when the economy and the sector needs it most.
According to Master Builders Australia modelling based on the government’s estimated 27,000 grants, the program will be used for $10 billion in building activity, supporting the viability of 368,000 small builders and tradies – the businesses which employ 800,000 people.
CEO Denita Wawn said with every $1 invested in home building activity, it provides $3 to the wider economy.
“This means that HomeBuilder will provide a boost for thousands of tradies; the cafes, pubs, and ute dealerships that they frequent; as well as the thousands of building supply businesses that depend on the industry,” she added. “The lag effect of building activity means that HomeBuilder comes just in time for builders and tradies staring out at a valley of death with forward work for the next 6 -12 months fast evaporating,”
Furthermore, Wawn said the eligibility criteria mean that the vast majority of Australians will be able to access the scheme.
“More than 80% of households have income of $200,000 or less.” Wawn said.