Australians will be handed $25,000 to renovate their homes or build new properties as part of a government cash splash to help get tradies back on the tools, but not everyone will be eligible – and there’s a catch.
Prime Minister Scott Morrison on Monday confirmed discussions were underway about a new homebuyers’ scheme – his government’s fourth COVID-19 stimulus package – with details expected to be announced on Thursday.
The scheme will help low to middle income earners and be put towards big projects like remodelling and home extensions – not small DIY renovations.
Singles will be eligible for the cash grant if they earn under $175,000 a year, while couples who earn less than $200,000 combined will be able to apply.
Australians could be handed $25,000 to renovate their homes as part of a huge cash splash to help get tradesmen back into work in the wake of coronavirus (file image)
Those who lost their homes during the bushfire crisis over the summer are expected to be given priority access to the scheme.
The plan will be limited to renovations that will cost a minimum of $100,000, The Herald Sun reported.
Mr Morrison warned there would be limits on the type of renovations the cash could be used for, adding there would be safeguards in place to avoid people ‘rorting’ the system.
‘You’ve got to try and avoid the rorting and people taking advantage of it,’ Mr Morrison told 2GB on Monday.
‘Even though Australians have been amazing during this crisis, there’s still those that will do the wrong things.
‘We are more interested in the larger projects and new home builds and things like that.
In details expected to be announced on Thursday, Australians earning under a specific income could be given $25,000 to renovate their homes
‘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.
‘The tradies and all the others – the apprentices and others who work in that home building sector are going to feel a lot of pain unless we can keep a continuity in the business with house construction.’
While it was previously reported the Australians building new homes could receive more than $40,000 as part of the scheme, Mr Morrison said $25,000 was ‘in the ballpark’.
Master Builders Australia chief executive Denita Wawn said the package would save small construction companies from a potential catastrophe.
Those who lost their homes during the bushfire crisis over the summer are expected to be given priority access to the scheme
She said the inclusion of renovations to the scheme – which also plans to broaden the first home buyers allowance – bypasses ‘the red tape’ of requesting planning approvals.
Ms Wawn agreed certain criteria should be met for the types of property renovations people could apply for, including making homes more resilient to natural disasters such as fires and floods.
Homeowners should also be able to use the grant money to rectify cladding and asbestos concerns, Ms Wawn suggested.
Economic modelling commissioned by the business determined the entire stimulus package could generate upwards of 105,500 jobs.
Already, the building industry has taken a significant hit for 2020/2021 and 2021/2022. Instead of 159,000 new homes scheduled for completion by 2021, there are only 116,000.
Based on previous economic downturns, the modelling warns it will likely take the construction industry four times longer to recover than other sectors.
‘We have seen that governments can fast track construction activity in response to natural disasters and COVID-19 is shaping up as an economic disaster,’ Ms Wawn said.
The proposed cash splash aims to help tradesmen with an estimated 70,000 out of work since the outbreak of coronavirus
Grants of up to $10,000 have at various times been offered by the states, but only to first homebuyers struggling to own their first property.
The government’s new plan is instead believed to be across the board – offering financial support to anyone wanting a new home or to drastically renovate their existing one.
Home auctions and inspections have recently been allowed for the first time in more than two months and are still subject to many restrictions.
The new stimulus appears similar to a proposal by the Property Council of Australia, though it recommended giving every buyer of a newly-built home $50,000.
Under that $2.5 billion proposal, 50,000 new homes would be built and more than 200,000 jobs created.
The proposed ‘new home boost’ initiative would be limited to the first 50,000 purchases and run between July 2020 and June 2021.
The PCA also wants stamp duty scrapped and foreigners welcomed back to Australia to buy more properties.
The proposal will reportedly go towards homes with a minimum renovation cost of $100,000
Property Council of Australia’s Proposed Stimulus Measures
– $50,000 grant to all purchasers of newly constructed dwellings only, not existing housing
– Potential to stimulate the construction of 50,000 new dwellings, supporting 200,000+ jobs
– Grant scheme limited to the first 50,000 purchasers, including lessees of new retirement living units, with these to be geographically spread
– Approximately $2.5billion of Federal funding required to stimulate
– No pricing cap – the aim is to bring forward all possible market demand and stimulate the greatest economic response
– Scheme would require commencement on site between 1 July 2020 and 30 June 2021 only
Property Council of Australia