A rush to qualify for the $25,000 HomeBuilder grant is driving off-the-plan property sales and deluging solicitors with conveyancy work before Christmas.
Home-buyers have until the end of the year to exchange contracts and register for the grant with the ACT Revenue Office but the realistic deadline is before the Christmas-New Year shutdown.
As at 4 December 2020, the ACT Revenue Office had received 881 Homebuilder applications – 595 for new builds and 286 for renovations.
A total of 24 Homebuilder grants had been approved, but the money can only be accessed when all the eligibility requirements are met. For example, for new builds, the grant will be paid when construction has commenced and the first progress payment has been made to the builder.
For off-the-plan and new home contracts, the property must be registered in the buyer’s name on the certificate of title no later than 31 October 2022.
The situation has been complicated by the Federal Government extending the scheme to 31 March, reducing the grant to $15,000 and having varying price thresholds in different jurisdictions.
Taso Nicolaidis, a solicitor at Baker, Deane and Nutt, said buyers, mostly off-the-plan purchasers, had swamped the firm looking to get contracts sorted and exchanged in time.
But he said there was a great deal of uncertainty around the scheme and inconsistent information had made for confusion.
At first, the 31 December deadline was problematic due to the Christmas period, and the extension had eased some concerns, with applications now able to be received until 14 April.
But Baker, Deane and Nutt was advising clients they were better off submitting applications before 31 December if possible.
”They took three months from the announcement in June to actually publish anything on their website which is problematic because now we’re fumbling around and there’s no real legislation to guide us,” he said.
”It’s all Commonwealth-level announcements and we’re expecting the Revenue Offices of each State and Territory to manage it.”
The ACT Revenue Office is yet to update its HomeBuilder webpage with the extension details, although there is a link to the Commonwealth Treasury information.
The tight squeeze is putting pressure on lawyers and the risk is that people will rush decisions.
Mr Nicolaidis said it was hard to find the time needed to provide the level of advice that buyers needed to understand what they are getting into.
The long lead times of many off-the-plan projects also posed challenges, with construction having to start within six months of the contract being signed and finish by 31 October 2022.
”A lot of these developments, especially off the plan, they’ve got dates for completion in March 2024,” he said.
”Even though people are rushing to get on to this HomeBuilder, there’s no certainty a lawyer can advise at this stage whether they’ll get it or not,” Mr Nicolaidis said.
”It’s worth a shot. It really depends firstly on what type of contract it is, when they start construction, and when they finish, and there are too many variables at this stage whether they get it or not.”
Applicants may also have an increase in income which could render them ineligible, which also might affect their financing of the purchase.
”If people aren’t thinking properly about it or being flippant, they could actually be rejected on the basis that they earn too much,” Mr Nicolaidis said.
”That is also being taken into consideration by their lender and it could land them in trouble right at the end when things are being settled up.
”The take-away is, yes do the application, but make sure you get legal advice.”