How does the Government’s new HomeBuilder scheme work?

As part of it’s economic response to the coronavirus crisis, the Australian government has announced a new home builder scheme in order to boost the nation’s building sector and generate jobs for tradies. Here, we’ll outline how the scheme works, and how to apply. 

Eligible owner-occupiers can access up to a $25,000 grant for new home builds or extensive home renovations.

There are a number of criteria that determine eligibility for access to Home Builder. To access the grant you must be:

• Aged 18 years or older
• An Australian citizen 
• Meet one of the following income caps, based on 2018-19 tax return or later:
  • $125,000 annual income for individuals 
  • $200,000 annual income for a couple

Homebuilder Building Contracts

To be eligible, a building contract must be entered between 4 June 2020 and 31 December 2020 that is either:

• Building a new home that will be the primary place of residence, with the property value not exceeding $750,000; or
• Substantially renovating your existing home that is the primary place of residence, with the renovation contract being between $150,000 and $750,000, where the existing property value is no more than $1.5 million.

Construction must commence within three months of the contract date. The work must be completed by a registered or licensed building service ‘contractor’ and named as a builder on the building licence or permit. 

The government has also stipulated that the building contract must be commercially reasonable and not inflated compared to the fair market price. The contract should be negotiated by two parties “freely and independently of each other” with each party maintaining a distance of an arm’s length at all times. This means, no prior special relationship – such as a relative – should exist between the owner and the contractor.

Types of properties

All types of dwellings are eligible for the home builder scheme including houses, apartments, house and land packages and off-the-plan new homes as long as they meet the above value price caps.

In order to access the HomeBuilder grant, there are also a number of restrictions in place. The HomeBuilder scheme is not available to:

• Owner-builders
• Those renovating investment properties
• Companies or trusts – you must be a “natural person”

Australian permanent residents are not eligible for the homebuilder scheme, you must be an Australian citizen.

The new or renovated home must be used as a principal place of residence. Any work completed must be to improve accessibility, safety and livability of the dwelling. It does not apply for additions to the property such as:

• Swimming pools
• Tennis courts
• Outdoor spas and saunas
• Sheds or garages that are not connected to the property

Applications for the HomeBuilder scheme vary depending on which state or territory you reside in, or plan to reside in.

State	Application
NSW	To apply for the home builder grant in New South Wales, visit the NSW Revenue Office website.
VIC	To apply for the home builder grant in Victoria, visit the State Revenue Office website.
QLD	To apply for the home builder grant in Queensland, visit the State Revenue Office website.
SA	To apply for the home builder grant in South Australia, visit the RevenueSA website.
TAS	To apply for the home builder grant in Tasmania, visit the Tasmania State Revenue Office website.
WA	To apply for the home builder grant in Western Australia, visit the Department of Finance website.
NT	To apply for the home builder grant in the Northern Territory, visit the Territory Revenue Office website.
ACT	To apply for the home builder grant in the ACT, visit the ACT Revenue Office.

When contacting your relevant state or territory authority, you must also provide the following documentation: 

• Proof of identity e.g. passport, Australian drivers licence or birth certificate
• A copy of the contract signed by both yourself and the nominated registered or licenced builder
• A copy of the nominated builder’s registration or licence
• A copy of your most recent tax return to demonstrate your eligibility within the income cap 
• Any other relevant documents such as council approvals, building contracts, evidence of land value etc. 

How does payment work?

Once approved, the $25,000 grant will be distributed to the applicant directly. HomeBuilder will be non-taxable – consistent with existing state and territory First Home Owner Grant programs. 

Where do I start?

If you’re interested in applying for the HomeBuilder scheme, start by having a conversation with a licenced or registered builder with the work you had in mind. They can provide a quote, and once you have a signed contract you can apply for the grant with your relevant State or Territory revenue office.