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Morrison Puts Up Cost of Renovations by 16.6% or $25,000

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let's see it the positive way: $25k for a $150k min bill:
so $15k of gst; current cost for government: $10k only,
now that 150k can not be hidden and will be paid to a builder: company/business and any profit will be taxed, $137k is a lot to match in costs and say you did not do a profit on that,
any builder claiming 30k profit/wage on the 137k (before GST) will pay $10k to the ato, government is break even;
then Bunnings etc sold timbers etc..more business working and paying taxes;
I actually believe that with these thresholds, the government will break even or make money;
@tech/a, what do you think? you have a better idea of the profit margins in that area than me;
IMHO, that measure will not cost a cent to the gov
 
Need something like this? I suppose it depends on both your economic ideology and vested interests.

IMO, with a long view, it's exactly what we don't need.
 
tech/a said:
I can’t believe how dumb some of the comments above really are




any contract including land in that period most will be built in 2021




you won’t have a builders licence
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I did say it takes 12 months to build a house.
 
I think it is a great plan and I think people who try to rort it will be sprung, well thought out stimulus that the rank and file can take advantage of.
Usually stimulus is available to everyone except the grass roots, I like it, just not in the position to use it, too late in life.lol
 
sptrawler said:
I did say it takes 12 months to build a house.
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yes it does but sign a contract between now and 31/12 and you could qualify
Doesn’t have to be built by 31/12
 
The majority of people who will go for the $25,000 will come into two brackets.
  1. Rorters.
  2. Those advised by financial planners to borrow a further $150,000 on their mortgage.
It takes a long time to catch rorters.

It takes forever to recover from overcapitalising on a house when the housing market crashes.

gg
 
Watch this space GG, a mate of mine who still works asked me if it was ok to pull the $20k out of his super, as a younger bloke at work had.
I said, I wouldnt because you havent lost any hours or wages, well now we find ouf the ATO is going to fine those that illegally accessed their super.
Anyone can rort a system, but if they get sprung I think the hammer will come down hard, the Government has bent over backwards to help people with taxpayers money, I dont think it will go down well if rorts are uncovered.
Only my opinion.
 
tech/a said:
yes it does but sign a contract between now and 31/12 and you could qualify
Doesn’t have to be built by 31/12
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Obviously, if it takes 12 months to build, it cant be built this year, also if you sign a contract in December a house cant be built in a day.
The difference is, I didnt call you dumb, you called me it.
 
The following applies to NSW, however, most states would have similar conditions and legislation.

Trying to operate as a builder is not for the faint hearted. It is extremely competitive with massive risks.

ASIC records show that 169 NSW-based construction companies went into administration, receivership or a court-ordered shutdown in the June quarter of 2019. This figure is not an anomaly and the current number is probably higher.

I’ll give an example of commercial building companies as I am more familiar with that area. A typical commercial builder (non-residential builder) with a yearly turnover of around $200mil would typically have a net profit of only 1.5% to 2%. This varies, some make a little more, a lot make less. They would typically work on a number of projects valued from $5mil to $30mil each. Nearly all commercial contracts provide no costs for delays caused by wet weather and have clauses for the Client to charge Liquidated Damages (LD’s) of up to $20k or $30k per week for the builder failing to complete the work on time. These are just some of the risks faced on projects.

As for residential renovations, a $150k renovation on a $1.5mil house will not be carried out by any tradie. The work is required to be carried out by a licenced builder. It is also mandatory for the builder to have Home Owners Warranty Insurance for the full value of the work. This insurance is specific to each project and is not just a blanket cover for all projects during the year.

In addition, the work will probably require a Development Application (DA) to be approved by Council, or at the very least a Complying Development Certificate (CDC) issued by a registered Private Certifier.

The idea that builders would be just tacking an extra $25k onto a $150k renovation is a fallacy. Anybody contemplating a contract for that amount of work will get quotes from a number of builders and they will be competing for the work. A quote for a $150k renovation is not just put together in a couple of hours. It takes a builder a couple of days of work to put together the quote. They are not just throwing these quotes around, they are trying real hard to win the job if they take the time to prepare a quote.
 
Excellent summation beaches, and you havent even included the engineering and drafting involved, yet still showed how difficult flyby night operations would have rorting the scheme and the reprocussions if they did.
 

The way I read it is that say you spend the minimum $150,000 on a renovation. After you have spent that you will get $25,000, so in effect the nett out of pocket is $125,000.

GST on the $150,000 contract is $15,000.

Not sure what the nett profit is these days but in the old days when I had an involvement with builders it was around 13% after tax so that is tax of $6,964 is paid

Thus the government gets back $15,000 + $6,964 = $21,964 or 88% of the grant.

But on the other hand, when you take the maximum, that is, building a $750.000 new home, the government will get a return far higher than the cost of the grant.

All that assumes of course, that the grant generates additional work. I doubt that will be the case for new homes which would likely have been built regardless of the grant. The grant will be a new home subsidy.
 
I would add the profit is after you paid some tradies employees..who will pay taxes
 
Caveman said:
Actually if you are already an electrician it's only a 2 week course.
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Yes but how much responsibility and accountability is attached to it?
I have a current A grade electrical license, will you rubber stamp my work?
If so give me your contractors number.
Like I said in my example, no builder is going to risk his license so some f$%wit can claim $25 k on a dodgy claim.
If they do they deserve everything they get.
 
Actually I really hope dodgy builders do rort it, then we might get rid of dodgy builders, but the loonies and the media will say the government is victimising them. What a weird country we live in.
 
You have one of the lowest COVID infections and death rates in the world.
You have a saving of $70 billion on the worst scenario case job seeker help package
Now you have the FIRST announced package to help boost employment.

No matter how good Morrison is doing there will always be someone who thinks the can do better.

All I see are people who are full of criticism and empty on alternatives.

If you want to see real lack of leadership and self centred political gain fed agendas just take a look at the USA. Agendas everywhere and not just Trump.
 
At what cost, and to whom, later @tech/a ?

Profligacy is being rewarded at the expense of the financially prepared and conservative. The gum't will *try to come after them via taxation and inflation.
 
PZ99 said:
So in the case of NSW I can build my first home and get the State grant of $10k, kick down the front door - get a tax invoice for $150k to replace the door and get a $25k refund. That'll work.
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I do that work. Bargen price. $200 a door. Hurry done miss out this week only we will smash a cupple off windows to. Have fuly license qolifide traydmens.
Ring Distroyd Doors Doned Dirt Cheep.
(we kick in doors betta than coppers)
 
wayneL said:
At what cost, and to whom, later @tech/a ?

Profligacy is being rewarded at the expense of the financially prepared and conservative. The gum't will *try to come after them via taxation and inflation.
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I dont see this as a waste of funds. Similar to first home buyers grants.
NBN
Pink Batts
$750 hand outs
$3000 for a baby
They are / were wastes in my view.

And what is the cost if there is no stimulus.?
 
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