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'It's unfair': HomeBuilder scheme makes Australian permanent residents feel left out

(R-L); Ashu Shukla, daughter Amya and wife Divya, are Australian permanent residents who had been waiting for a grant to start building their first house. Source: Supplied

The federal government’s much awaited Covid-19 stimulus package to inject life into Australia’s limping construction industry has been announced. A grant of $25,000 will be given to qualifying citizens for the construction of new residential properties and renovation of existing ones.

Calling it the ‘HomeBuilder package,’ worth $680 million, Prime Minister Scott Morrison announced that the federal government will hand out $25,000 to those who wish to build a new house or renovate an old one between June 4 and December 31, 2020.


Highlights:

  • Federal government unveils HomeBuilder package, $25K grant for new homes and renovation
  • Enquiries from first home buyers have gone up, say real estate agents and builders
  • Permanent residents feel left out, allege grant only for the rich

Prime Minister Morrison said that this grant would help those Australians who have been dreaming to build or renovate their own home, a dream which “they thought might have been crushed by the coronavirus”.

He also stated that HomeBuilder package will help keep the “jobs of builders and apprentices and tradies, all of those who depend on this critical industry across the country."

Prime Minister Scott Morrison announces the new HomeBuilder stimulus package in the NSW town of Googong.
Prime Minister Scott Morrison announced the HomeBuilder stimulus package in Googong, New South Wales on June 4.
AAP

Who gets HomeBuilder?

Australian citizens with an annual income of less than $125,000 for individuals or $200,000 per couple are eligible for this grant.

This shall apply to only new residential properties worth up to $750,000 including the value of the land, or for undertaking renovation projects valued between $150,000 and $750,000.

The enhanced value of the residential property after renovation shouldn’t exceed $1.5 million.

This grant can be used only to enhance the accessibility, safety and liveability of owner-occupied properties and not for adding swimming pools, tennis courts, outdoor spas, saunas, sheds or garages to existing dwellings.

Mixed feelings

The HomeBuilder package announcement has been met with mixed reactions.

While some say this will help first home buyers realise their dream of buying a house, others believe this is aimed at pumping money into big construction businesses.

There's a widespread feeling amongst permanent residents that the federal government has tilted this deal in favour of Australian citizens.

Australian Federal Government will give cash grant to build or substantially renovate homes
A residential construction site.
AAP

Grant for the citizen

Simran Khatrha, Director of real estate agency Biggin & Scott's Epping office in Melbourne, says this announcement has “sparked a lot of interest in a single day, mostly amongst first home buyers”.

“People were waiting for its announcement with bated breath to lock in their residential property deals. I have been inundated with phone calls from interested buyers since the announcement was made,” Mr Khatrha says.

However, he adds the HomeBuilder package has left many of his potential clients “disappointed” too.

“Many phone calls I answered, ended on a low note because often, first home buyers are permanent residents, especially migrants. This grant requires the beneficiary to be an Australian citizen. Many of my clients don’t qualify for it only for this reason” he says.

Forgot the permanent resident?

Ashu Shukla, an Australian permanent resident, says he was waiting for this announcement since one month, so that he could begin constructing his first home in Australia on the land that he had bought in April.

“HomeBuilder makes me feel left out. Why have permanent residents been discriminated against, when we are eligible for all other benefits like Medicare, Centrelink, JobKeeper etc as are citizens,” he asks.

Questioning the government’s rationale behind making this distinction, Mr Shukla views HomeBuilder as a “stimulus package for big builders and their rich customers”.

“If the federal government were serious about helping the entire construction industry, they would have let in permanent residents also, because that would have generated more business for tradies and tax for the government,” he comments.

Good news for first home buyers

Pavneet Singh Mann, Director of the Melbourne-based construction company, 5AB Homes, believes this is a "great announcement to boost the construction industry of Australia".

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Pavneet Singh Mann of 5AB Homes.
Supplied

“It is a welcome news for first home buyers as it is for those who wish to renovate rundown properties. Those who make use of this grant must be very mindful that construction must commence within three months of signing the contract with a builder,” he explains.

Mr Mann highlights that this scheme is “encouragement for those people who wanted to demolish a rundown property and live in its improved version.”

Renovation in the time of coronavirus

Taking a cue from Mr Mann’s comment about renovation, Ashish Vohra, a Melbourne-based businessman who has been planning to renovate his house, feels HomeBuilder will benefit only those who can spend over $150,000 on renovation.

“Our house is only three years old but needs some extension. Our budget is $20,000 - 30,000, for which I can engage tradies, not necessarily a big builder. In that case, neither do I get any benefit from HomeBuilder, nor does the small-time tradie,” he says.

“In the current times of financial insecurity, how many people can afford to spend at least $150,000 on renovation to get this grant of $25,000? Australia is already in recession, they say,” Mr Vohra adds, highlighting the financial impact of the coronavirus on the Australian economy.

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