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What you need to know - ACT Homebuilder Grant

July 26, 2020

On 15 July 2020 the ACT Revenue Office (ACTRO) released its guidelines on the Federal Homebuilder grant.

The ACTRO guidance on the Federal HomeBuilder grants are available here.

The Homebuilder grant provides eligible owner-occupiers $25,000 towards the cost of building or buying a new home or substantially renovating an existing home.

Information about the Federal Homebuilder grant are detailed below.

WORK TYPES COVERED

  • Contract to build (house and land package).
  • Contract to build on land your client already owns.
  • Contract to purchase a new home (off the plan or speculative home).
  • Substantial renovation work, including ‘knock-down rebuild’.

WORK TYPES NOT COVERED

  • Additions to property such as swimming pools, tennis courts, outdoor spas, saunas, sheds or garages (unconnected to property).
  • Stand-alone granny flats.
  • Work carried out by owner builders and investors.

CONTRACTS MUST BE SIGNED BETWEEN

4 June 2020 and 31 December 2020.

INCOME CAPS

For the 2018/2019 or 2019/2020 financial year:

  • $125,000 per annum for an individual applicant
  • $200,000 per annum for a couple

CONSTRUCTION TIMEFRAMES

Building work must commence within 3 months of the date of signing the contract.

Commencement means ‘substantial earthworks, excavations, demolition and physical building work’

You may be asked for evidence to demonstrate that you have commenced construction, this may include for example:

  • A building work commencement notice.
  • Inspection report from first stage inspection from building certifier.
  • A building contract and evidence of payment of deposit and first instalment (following completion of first milestone of works).
  • Photographic evidence, showing time and date of photo, of construction work undertaken, including substantial earthworks (eg, excavation of footings or a basement), demolition of structural elements of a building and physical building work (eg, pouring a slab).

Your client may ask you for a statutory declaration stating that construction has substantially commenced in line with the examples above.

NOTE: Preparatory works such as site clearing, fencing, markings, delivery of building products will not fall within the definition of ‘commencement’.

CONSTRUCTION CRITERIA

  • Owner-occupied as principal place of residence.
  • Property must be in ACT.
  • Property must be fixed to the land (no mobile homes).

APPLICANT

Applicant must be:

  • Natural Person (not a company or trust)
  • 18 years or over
  • An Australian Citizen

Joint applicants must be married or in a defacto relationship.

IMPLEMENTATION

ACTRO

PROPERTY VALUE CAPS

  • New home $750,000 (property value not to be exceeded including house and land).
  • Existing property not to exceed $1.5 million.

CONTRACT PRICE CAP

  • Contract value for new home not to exceed $750,000 (including house and land)
  • Contract value of substantial renovation between $150,000 and $750,000

BUILDER CRITERIA

All building work must be undertaken by a licenced builder

TAX

Non-taxable

TIMEFRAMES FOR APPLICATION

Application must be made after the contract is signed and lodged by 31 December 2020.

INTEGRITY MEASURES

  • In negotiating a building contact, the parties must deal with each other at arm’s length.
  • This means the contract must be made by two parties freely and independently of each other, and without some special relationship, such as being a relative.
  • The terms of the contract should be commercially reasonable and the contract price should not be inflated compared to the fair market price.

Application Form

In the ACT, applying for the Grant is a two-part application to ACTRO: 

Part A: Registration.

Complete the form here as part of your application for the Grant. Completing the form does not in any way constitute eligibility for the Grant. You must lodge the Part A form by 31 December 2020 for your application to be considered.

Part B: Detailed Application.

A comprehensive application form will require that your client provide information about you, the type of construction, as well as detailed supporting documentation. You must lodge the Part B form by 31 October 2022 for your application to be considered.

The client/s will have to provide personal information about their income and about the building contract. 

They will need to supply evidence that you are licensed and provide a copy of the building contract.

The client/s have to sign a statutory declaration when they complete the form.  While builders can provide information to help clients prepare forms they should leave the actual completion of the form to the clients as the clients have to declare that the contents are true and correct.

Eligible applicants may also be able to benefit from the existing Home Buyer Concession Scheme or Deferred Duty in conjunction with the Federal HomeBuilder grant.

Contact a HIA Workplace Adviser on 1300 650 620 for further information and advice

Current at: 27 July 2020
HIA ref no: AFSINP1353