The Queensland Government has introduced a $10,000 Building Boost Grant to support Queensland's struggling building industry and assist housing affordability for home buyers.
Passed by the Queensland Parliament on 27 October 2011, the Building Boost Grant Bill 2011 has retrospective effect and applies to eligible transactions undertaken between 1 August 2011 and 31 January 2012.
Here, senior associate Michelle Hall outlines what home owners, builders and investors need to know about the Building Boost Grant.
Key points
- The Building Boost Grant is designed to stimulate the Queensland housing market and help with affordability, supply and employment.
- The scheme is temporary and only applies to eligible transactions undertaken between 1 August 2011 and 31 January 2012.
- A first home buyer may be eligible to up to $17,000 in grants, as they can obtain the $10,000 Building Boost Grant along with the $7,000 First Home Buyer Grant.
- Industry analysts will be watching closely to determine whether the Grant stimulates the currently depressed housing and construction industry.
Eligibility for the Queensland Building Boost Grant
The Building Boost Grant is accessible to all home buyers and investors who are over 18 years of age, as well as corporations and trustees who enter into a contract to purchase or build a new home, townhouse or apartment in Queensland for the purpose of living in or investment. The total value of the land and the home must be less than $600,000.
Owner-builders may also be entitled to claim the Building Boost Grant upon meeting certain requirements. A substantially renovated home may also qualify under certain conditions.
While the owner of the property does not have to live in the home, the home must be occupied as a residence for at least three months in the first year of ownership. Renting to a tenant satisfies this occupancy requirement.
Because the Building Boost Grant is available for eligible transactions undertaken between 1 August 2011 and 31 January 2012, contracts to purchase or build must be entered into between these dates. However, to avoid abuse of the scheme, replacement contracts entered into on or after 1 August 2011 that replace ineligible contracts entered into before 1 August 2011 will not qualify.
Once the contract is entered into, the building work must start within 26 weeks of the date of the contract, and be completed within 18 months of the work starting. For contracts to purchase new off-the-plan homes, building work must start by 31 January 2013 and be completed by 31 January 2015.
Where the eligibility requirements are met, the same applicant can obtain the Building Boost Grant for each new home purchased or built, as long as the transactions are separate. However, if an applicant or a related person of the applicant has applied for, had approved or been paid four or more Building Boost Grants, the Commissioner of State Revenue has to be satisfied (after considering the relevant factors set out in the legislation) that the transaction entered into advances the purpose of the legislation, is not an artificial, blatant or contrived arrangement, and has not been entered into for the sole or main purpose of obtaining the Building Boost Grant.
Using the Building Boost Grant to boost your business
The Building Boost Grant provides a marketing opportunity for developers and/or builders looking to attract buyers. Applicants can apply for the Building Boost Grant from the Office of State Revenue or from an approved lodger (eg a bank) in certain circumstances. Developers and/or builders should become familiar with the application process and eligibility requirements so they can assist their customers in this process and attract more work.
Impact of the Queensland Building Boost Grant
It is unclear yet as to whether the Building Boost Grant has had a positive impact on the construction and housing industry. Other economic issues, such as the recent removal of the stamp duty concession rates for home buyers, may weaken the effect of the Building Boost Grant. While the legislation has been passed, concerns have been raised in Parliament about the impact of the Building Boost Grant and whether it will achieve its desired effect. For example, some in the housing industry are concerned that sales will decline after the Building Boost Grant incentive is removed.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
