Phillip Coorey | 3 June 2020
Prospective new home builders and those undertaking substantial renovations will benefit from $25,000 cash grants, under a $688 million program designed to stop the housing construction industry falling into a hole.
The plan, to be unveiled on Thursday, will be confined to people on middle incomes and to new homes and renovations valued at no more than $750,000. It aims to build 30,000 homes by Christmas.
The government also flagged major changes to the JobKeeper scheme that will be unveiled in the budget update, which has been postponed a month until July 23.
Under the housing scheme, for a renovation to be eligible, it will have to cost between $150,000 and $750,000, which effectively rules out most projects other than a building project such as an extension.
The pre-renovation value of the house must not exceed $1.5 million. Sheds, yurts, granny flats, pools, tennis courts and any other structure not attached to the home will not be eligible.
Singles who earned no more than $125,000 the previous financial year and couples who earned up to $200,000 will be eligible for the grants.
The handout will be available from June 4 until September 31 and construction must start within three months of the contract date.
This is a short-term, targeted program so developers won’t be able to capitalise the grant into their price.— Michael Sukkar, Assistant Treasurer
Policy designer and Assistant Treasurer Michael Sukkar said the scheme was designed so as not to cause a blowout in house or renovations costs, which has happened with previous assistance schemes.
He said industry consultation had satisfied the government that with the current pipeline of investment due to dry up in September, “pricing is very competitive due to the forecast downturn in commencement, coupled with the forecast lack of demand”.
“This is a short-term, targeted program so developers won’t be able to capitalise the grant into their price,” he said.
“As HomeBuilder can only be used to construct new or substantially renovated properties, its eligibility criteria manages the risk of longer-term affordability challenges by increasing supply.”