Homebuyers grant: What the $25,000 renovation handout means for you

If you’re building a new home or renovating, you’re probably celebrating this government plan right now – but there are some big catches.

The government’s new homebuyer grant scheme has already sparked a flurry of excitement – but it seems not everyone will benefit.

Specific details of the package are still yet to be announced, but so far, we do know that it will involve cash grants of around $25,000 for eligible Aussies keen to build a new home or even renovate the one they’ve already got.

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It’s all part of an ambitious plan to prop up the construction and trades sector, with Prime Minister Scott Morrison warning of a looming fall in home building earlier this week.

“We are looking at a bit of drop off in that current home building that’s going on. That’s not good for tradies and not good for jobs,” he previously told 2GB.

Here’s a roundup of what we know so far – and who the major winners and losers are likely to be.

THE LOSERS

• Rich Aussies: Initially, there were concerns the scheme would end up giving free money to millionaires – but the Government has poured cold water on that accusation, with sources indicating it will be means-tested.

• DIY-ers: There was a frenzy of excitement when it seemed the cash grants would also go towards renovations – but it turns out homeowners will not just have to match the grant dollar for dollar, but spend more, meaning you’re likely looking at a bill of more than $50,000 minimum. The aim is to employ more tradies, so it seems DIY projects around the home also won’t qualify.

• Inner city dwellers: It is understood the new scheme will mirror existing first homebuyer packages which are available for homes valued under $750,000 in most states. On one hand, that makes sense as it stops handouts being spent on mansions – but as you would be hard-pressed to find even a one-bedroom apartment in inner Sydney or Melbourne for less than that, it will potentially rule out millions of Australians.

Details are yet to be announced, but the policy is already making waves. Picture: iStock

THE WINNERS

• Low to middle income earners: News.com.au confirmed earlier this week that the package will be restricted to families with a combined taxable income of less than $200,000, and that it is specifically targeting that group to help them get a foot on the property ladder.

• New builds: It’s a no-brainer, but the policy is designed to boost construction so is available for new homes only, so those after existing properties need not apply.

• Bushfire victims: The new scheme will also be designed to help bushfire victims who lost their homes this summer to rebuild and “bushfire-proof” their properties.

• Tradies: Again, the whole purpose of the plan is to protect the construction industry and tradie jobs, so it is hoped it will lead to a spike in professional projects.

SCOMO SPEAKS

So far, the Government has remained tight-lipped about the scheme, which is yet to be formally announced.

But on Monday, Prime Minister Scott Morrison did provide a few details on the reasoning behind it.

“House building, residential construction, is going to be one of those gaps we need to address,” Mr Morrison said.

“We’ll have more to say about this once the details are finalised, but it is about creating jobs and supporting jobs in our residential construction sector.

“The tradies and all the others, the apprentices and others who work in that home building sector, are a sector we know are going to feel a lot of pain unless we can keep a continuity in the business with house construction.”