Australians pledging to build a new home or renovate their own are set to receive a $25,000 cash injection, as part of the government’s fourth stimulus package unveiled after the nation recorded a 0.3 per cent drop in GDP in the March quarter.
The $688 million HomeBuilder scheme will be granted to people who sign contracts to build or substantially renovate their home from Thursday until the end of the year.
Prime Minister Scott Morrison said the scheme would drive a "tradie-led recovery" of the economy, and would support 140,000 direct construction jobs and a million workers in the wider residential building sector, including architects, materials suppliers and manufacturers, and engineers.
"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 get started," he said on Thursday.
Also read: The big winners in $25k home-building scheme
The cash grants are in response to a near 30 per cent downturn in the housing and construction sector, which saw new build forecasts drop from 171,000 pre-coronavirus to just 111,000 post-coronavirus.
How do I get the $25,000 HomeBuilder grant?
The home-building and renovation scheme will be means-tested.
Similar to the government’s first home deposit scheme, single Australians who earn up to $125,000 and couples who collectively earn up to $200,000 will be eligible for the scheme.
They can be used for new homes valued up to $750,000 including land, or renovations worth between $150,000 and $750,000 if the home is valued at no more than $1.5 million before the work begins.
Home owners and buyers would need to confirm they’re using the money for large projects like building a home, remodelling or adding an extension, but cannot use the funds for investment properties or to build things outside the house such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages.
And, DIY jobs are out of the question: the work must be done by a licensed builder, not an owner-builder.
The program is demand-driven, but the price tag suggests the government expects about 27,500 people to take up the offer. The grants will be paid via each state government.
Master Builders chief executive Denita Wawna, who initially predicted some 400,000 building businesses to fold and 1.2 million job losses, said it was a “lifeline” for the industry.
"It will mean more new homes, more small businesses and jobs are protected and (it will) provide a stronger bridge to economic recovery for our country," she said in a statement.
Are you a millennial or Gen Z-er interested in joining a community where you can learn how to take control of your money? Join us at The Broke Millennials Club on Facebook!