Ever since the announcement of HomeBuilder grant worth $25,000, property investors are curious to discover every vital detail about it. Property investors are keen to know if they can utilize the grant for renovating or extending their investment property. Tax return Australia covers the financial year from 1 July to 30 June and become due by 31st October every year. Property investors desire to find out if they renovate their bath area or kitchen, what kind of tax depreciation deductions will be claimable. It is worth noting that property investors will not remain eligible for HomeBuilder grant in case they purchase a brand new house. Additionally, trusts and organizations that own residential property will also not remain eligible for HomeBuilder grant.
Here are some vital details about HomeBuilder grant:
What is HomeBuilder Grant?
As of now, the Australian Government has decided to help the residential construction industry. In its bid to assist the industry, the country’s government announced the creation of HomeBuilder grant worth $25,000 for first home buyers and owner-occupiers. According to treasury.gov.au, if you shift to the property as your main place of residence soon after renovation and meet all the eligibility criteria, you will get the grant. You may seek the help of professionals to calculate the yield on investment property.
How to Access HomeBuilder Grant?
If you want to access HomeBuilder grant, you must fulfill some conditions. You must be a natural person (no commercial goals) and aged 18 years and above. You should be an Australian citizen. You should belong to one of the two income caps given below:
- $1,25,000/annum for the individual applicant based on their 2018-19 taxable income, or
- $2,00,000/annum for a couple based on combined 2018/19 taxable income.
You must enter into a contract from June 4, 2020, up till December 31, 2020, to construct a new home as the main residence place. Here the property value of the house and land must not exceed $750,000.
If you renovate an existing house as the main residence place where renovation contract is more than $150,000 and does not go beyond $750,000. Additionally, the value of the existing property must not exceed $1.5 million. And, finally, you should be able to prepare your property report effectively to reduce your tax liability.
Can You Use Homebuilder Grant to Construct a Granny Flat?
The HomeBuilder grant will not be allowed to use for making any additions to your main residence place. The grant will not be used for structures like granny flats, garages, sheds, swimming pools, etc.
You should apply for HomeBuilder grant by December 31, 2020, to the concerned Revenue office. You must hire a professional to prepare your tax depreciation schedules and reduce tax liabilities. Property investors will not be permitted to use HomeBuilder grant for a future investment property renovation. However, you will still be able to claim significant tax depreciation deductions from your renovation. You are eligible to claim tax depreciation for former owners’ renovation. Meanwhile, if you rent a room at your main place of residence, you can utilize HomeBuilder grant for your renovation.