As of 1 October 2015 Online Accounting and Taxation Solutions has changed name to Affinitas Accounting, you have now been redirected to the new page.

5 Top Questions About the HomeBuilder Grant

homebuilder grant

The phone has been ringing off the hook with questions about the HomeBuilder grant.

Here, I’m focusing on those who want to buy land and build (rather than renovators – that’s a whole separate topic on its own).  First, some basics about the HomeBuilder grant:

To qualify for the $25k HomeBuilder grant you must:

  • Be Australian citizen
  • Earn below $ 125k for singles or $ 200k for couples
  • Sign a building contract between 4 June and 31 December (and start the build within 3 months of contract date)
  • Be building a home where the value of the completed house and land must be $750k or less
  • Own the home in individual names and occupy it as your home. (no investment properties)

The HomeBuilder Grant: Top 5 Questions Answered

The easiest way to explain some of the complexities around the HomeBuilder grant is to jump straight into some of the common questions people are asking.

 

1. Can I get both the HomeBuilder Grant and the state based First HomeOwners Grant?

As long as you meet the eligibility for each grant independently, you can receive both if you are building your first home.

 

2. Does this mean that I can get into the market with no deposit?

There are two elements to answering this question. Firstly, meeting the requirements for genuine savings and secondly the timing of when the HomeBuilder grant will be paid.

Let’s take a step back and look at how much you typically need to buy a home.

If you are a first-time homebuyer in Queensland and you qualify for the stamp duty concession, to buy an existing home without the FHOG you would need a deposit of 9% or around $40 000. Of this amount you will need to demonstrate that 5% has been genuinely saved. Neither the FHOG, nor the HomeBuilder grant count as genuine savings.

If you have owned a home before, you would need a deposit of around 10.5 % or around $ 46 300. Again, of this amount you will need to demonstrate that 5% has been genuinely saved.

While the grants may help you reduce the amount you end up borrowing, if you are hoping to get into the market with a new home build with a lower deposit, there are some tricky aspects of how and when the grants are paid that you’ll need to be across and plan for.

Essentially, as with the FHOG, the HomeBuilder grant will not be able to be used as part of your initial deposit.

The table sets out what the overall contribution is with a maximum loan of 95% including mortgage insurance, as well as how much is needed at land settlement for both first homebuyers and others. While the actual contribution needed is low, the timing of payments of the grants, and the need to demonstrate genuine savings, means you will actually need a lot more.

homebuilder granthomebuilder grant

3. How do I work out whether I’m under the income cap?

The income cap is the same as the First Home Loan Deposit Scheme, so your income as an individual must be under $125,000 per year and, as a couple, your combined income needs to be under $200,000. This is your gross income before tax (excluding Super). You will be able to find this on your 2019 Notice of Assessment issued by the ATO.

 

4. If I was under the income cap last year but may go over this year, am I still eligible for the HomeBuilder grant?

The wording of the grant is that the income cap will be based on your individual ‘2018-19 tax return or later’ so if you earned less last year, but will earn more this year, they will use the most recent year to confirm your income. 

There is a requirement to report any change in your circumstances to the state revenue office, so the intention appears to be that if you will exceed the income cap before you are paid the grant that you would no longer be eligible.

The HomeBuilder grant may be audited, and if for example you earned $190,000 as a couple in 2018-19 tax year and then earned $220,000 in 2019-20 tax year, you could be required to pay back the grant. 

 

5. What if I am a citizen but my spouse is not?

There are some things we don’t know yet here, as the application form for the HomeBuilder grant Scheme hasn’t yet been issued, so we don’t know the specific questions that will be asked. 

However, if it’s going to be similar to the First HomeOwner’s grant, then the eligibility is based on the applicants – which is based on the property ownership. 

If this is the case and the property is just in the Australian citizen’s name, you may qualify for the HomeBuilder grant.

Given the uncertainty around what the formal criteria on application will be, I would recommend waiting to see what these are in your state before signing a contract if you need the grant to complete the build. As an industry, we are seeking clarity around Treasury’s intentions here.

You would also need to seek advice here around whether you may meet the criteria to have two people on the loan where only one is on the title (and consider whether this structure is right for you).

 

I’ll be posting updates as we get more clarity around the ambiguous areas, but in the meantime, if you’d like to understand what this grant might mean for you, reach out at or give me a call on 0430 383 996.

Need friendly advice? Talk to our staff today about how we can help your business succeed.

Subscribe to Affinitas Accounting's newsletter for our latest updates, tips of the trade in your email inbox.

  • I’ve been dealing with Affinitas Accounting for about 3 years now and I have found them to be nothing but friendly and helpful. I’m a Bookkeeper and on occasions have been stuck with various accounting problems. Affinitas have not hesitated to spend time with me until the problem was solved. Any queries or questions have always been answered in a timely manner.

  • I highly recommend coming here for all your tax needs! They explain everything you need to know about tax thoroughly and go about there jobs professionally, always leave here with a cheery smile and satisfaction.

  • Affinitas Accounting has been so helpful with the restructure of my business. They made it an easy process and explained it in a language that was easy to understand. My ongoing tax and gst is all prepared by them, they’ve really taken the stress out of it all to let me focus on growing my business.

  • Tax Accountant & Financial Advisor Brisbane - Affinitas Accounting
    Rebecca & Russel Johns

    Since moving to Affinitas Accounting we have a clear understanding of companies and trusts. We have no hesitation in saying the team here will meet and then exceed your expectations! I never feel like i am annoying them. Thank you Team Affinitas

  • Tax Accountant & Financial Advisor Brisbane - Affinitas Accounting
    Paul Maclaine

    Affinitas has looked after all our financial needs for our business and personal tax returns. We have been with our accountant for 10+ years. I have no hesitation in recommending Affinitas to anyone looking for an accountant or any financial advise. We have always found and received friendly professional and practical advise.

  • For the past 6 years, Tammy has been lodging our tax. The team always spend the time to explain how things will affect us and always manage to maximise our returns. We highly recommend the team to anyone we speak to and have had friends move to do their future tax with the team at affinities accounting. Couldn’t recommend them highly enough.

  • Tax Accountant & Financial Advisor Brisbane - Affinitas Accounting
    Kirsty Whittaker

    I’ve been using Deb from Affinitas Accounting now for many years and have found her to be excellent in looking after my taxation needs. I’m in Tasmania, Affinitas Accounting is in Queensland and distance is no barrier. She understands my business needs, everything is done in a friendly and efficient manner and I happily recommend to anyone looking for ‘down to earth’ taxation advice.

  • Tax Accountant & Financial Advisor Brisbane - Affinitas Accounting
    David Williams

    We’ve been with Affinitas Accounting for over 5yrs when they were known as Online Accounting & Taxation Solutions. From our initial phone call with Brad looking for an accounting team that would meet our expectations as well as provide efficient service, we’ve been really impressed with the team’s professionalism, knowledge & expertise.

  • Tax Accountant & Financial Advisor Brisbane - Affinitas Accounting
    Allyson O'Connell

    Debbie is our accountant and has been for seven years. She is thorough and always does what she can to honestly get us the best return but always adheres to the ATO guidelines. We recommend her to our friends and wouldn’t take our business to anyone else. Thanks Debbie.

  • We have only been with Affinitas Accounting for the past 12 months but in this time they have by far exceeded our expectations of an accountant and far surpassed previously used accountants.
    Affinitas are not just about annual returns, BAS statements etc, they take the time to get to know you enabling them to provide advise to help you work toward personal & business goals.

  • Tax Accountant & Financial Advisor Brisbane - Affinitas Accounting
    Mark D’Andrea

    Can’t fault Affinitas.

    Have been coming here for years (when it was then called online tax). Deb has been happy to always go the extra mile and doesn’t mind dispensing helpful advice throughout the year.

  • Tax Accountant & Financial Advisor Brisbane - Affinitas Accounting
    Deagon Fixing

    I have been a client of Affinitas Accounting (previously Online) for the past 8 years. It is like a one stop shopping experience, all my needs were addressed in the one office.

    Thanks Affinitas you for all your assistance and I would strongly recommend them to anyone to use

  • This field is for validation purposes and should be left unchanged.