Ready to build or renovate your home? The government's newly implemented HomeBuilder Grant might be just what you need to get those hammers and saws started. The $25,000 grant has been created to help bolster the building industry during the downturn caused by the COVID-19 backlash. While some free money sounds great, it does come with a few conditions, enough to mean you need to be completely sure of your eligibility as well as the rules and restrictions before you dive in.

The terms and conditions are numerous so it's worth combing through them one by one to be sure there is a perfect fit between it, you and your building plans. If you have any doubts speak with a professional about your circumstance, your home buying plans and goals and your financial position.

Buying a home is a huge undertaking and should always be done with serious professionalism. As soon as you allow emotion (even a great emotion like excitement) to come into the equation your ability to make a sure and steady long-term investment is decreased.

We've put together this article to help give you some facts about the benefits of the HomeBuilder Grant including who will get the most from it and how best to use if you can tap into a little more financial help in building or renovating your home.

Personal Eligibility

To be eligible for the HomeBuilder Grant you need to be:

• A legal adult, which is over the age of 18
• An Australian citizen
• The property occupants
• Earning less than $125,000 per year (single application) or less than combined $200,000 per year for couples.
• Contract ready in 2020. You must have your signature down on the work contract or property purchase by December 31st.
• Build ready almost immediately. You have three months from signing the contract to begin building works.

There are also restrictions in place on the property value and renovation costs, so these need to be considered as it may impact your build location.

Property Price caps and Renovations

As well as individuals, there are also conditions applied to the property and building work. This is not a grant intended for small renovations or refitting, this is for serious modifications, with a serious price tag or a new home built from scratch.

• Renovations. Work must be more than $150,000 and the home you are renovating cannot be valued higher than $1.5 million.

• New home. The value of the combined house and land cannot exceed $750,000

Going into a little more detail on some of these points.

Multiple parties on a title

For those looking to share the property title, you must take the time to make enquires here because not all shared titles will be considered for the grant. In the case of the First Home-owner's Grant, as long as those entering into the purchase have not previously owned property then the grant will be accepted, regardless of their relationship (i.e. siblings, friends). This is not as straightforward in the case of the HomeBuilder Grant so please take care to do your research if you are planning to have more than one name on the title and you are not in a long-term relationship.

Getting started early means everything running smoothly

You only have three months from signing the contract to begin building works, which means you will have to have those settlements completed and correct, pronto. You may want to ask about shorter settlement periods but it's important to always get this checked out by your conveyancer. In the case of getting your build started on time getting a qualified and proven conveyancer is essential. Any mishaps caused by incompetent work will cost you severely, especially if you were expecting a HomeBuilder Grant to help ease some of the costs.

You are the primary resident

Immediately after the build of a new home or those renovations are completed, the grant recipient must occupy the property. This deal is for owner-occupiers only so no investment property types, even those with short-term holiday rentals in mind, will not be allowed.

Income caps

Making sure the grant goes to the people who need it most. There are a limited number of 2020 HomeBuilder grants available so to make sure the money goes to people who would struggle without it, there are limits on earnings. If only one name is on the title, that person needs to be earning less than $125,000 in a previous tax year. i.e. the information will be taken from tax return from 2018-19 or 2019-20 as proof of income.

For couples, the combined income will be less than $200,000 per year as shown on a previous income statement.

So that covers all the restrictions and conditions of what you can't do, all that's left is what you can do.

Australia wide

The grant is open to all regions of Australia, both city and regional, however, you may find some areas, especially those around Sydney may be off-limits due to the property value caps. In some cases, even a small land size and modest property can easily break the $750,000 limit.

That does give some states and city areas, a much bigger advantage. The grant conditions across the nation are the same, only property prices and land value vary greatly. For those looking for a sea change, tree change, or an outer suburb house and land package, you may find the grant hits the sweet spot.

Who is the best fit for the HomeBuilder Grant?

This grant fits the first home buyer perfectly. Especially when they will also be eligible for the first homeowner grant, giving the first homeowner's that extra peace of mind that they won't have to fork out thousands of dollars in duty tax after a property is purchased. There are also many benefits on offer for first home-buyers building their home rather than buying an existing property, so that can double-down on those benefits as well. It's well worth checking out what grants and incentives are in play in your State or Territory.

All this, coupled with incredibly low-interest fees makes the HomeBuilder's incentive perfect for those who are looking to buy small and get their first taste of homeownership.

Were you already going to build?

Overall those that are going to get the best use from the HomeBuilder Grant are those who had already put the foundations in place to build a property or do a serious renovation.

That means:

• You have a deposit ready
• Pre-approved loans get the green light
• All the research has been completed on the property type and property value
• You know exactly what you want your dream home to look like when it's completed.

Rushing into a purchase simply because a grant is available is bad news for everyone. This needs to be part of your long-term plans and well and truly in motion beforehand. What this grant availability means is, those individuals or couples who were about to purchase a property to remodel or land to build on, who may have been put off by the current COVID-19 uncertainties will have every reason to go ahead with their plans and get moving on their home goals.

For those who do not have employment impacts due to COVID-19 restrictions, have a deposit saved and are committed to a build, then-current land prices, interest rates and economic stimulus incentives can have you sitting in the best seat of the house for your building plans to be fulfilled at the best price imaginable.

As always, research and planning are essential for making sure the home you buy and create is the stuff of dreams, not nightmares. While there is no such thing as a property success guarantee, there are many ways you can successfully estimate the future worth of a home to see it pays out in the long run.

The main things to take into account when scoping a region, suburb or town for future economic strength is:

• Accessibility: Do you have schools, shops, transport and parks in close proximity?

• Employment: Are there strong employment opportunities such as offices, sustainable farmland, or flourishing tourism?

• Is this a family-friendly environment with opportunities for growth and attractive benefits for new home buyers.

If you need any assistance or would like any clarification on your property purchase terms, please contact our office and speak to any of our friendly, professional staff by phone or video call.