As part of the economic response to the COVID-19 pandemic, the federal government’s HomeBuilder program provides eligible owner-occupiers – including first home buyers – with a grant of $25,000 to build a new home or substantially renovate an existing home before the end of 2020. It can pay to check if you’re eligible and what you’ll need to do to apply if you are.

HomeBuilder is designed to complement existing state and territory first homeowner grant programs, stamp duty concessions and other building schemes. The $688 million program has been set up to support a construction and building industry that has so far weathered the storm of the economic downturn caused by the pandemic – but is starting to show signs of a slowdown.

Who can apply for HomeBuilder?
Much like other economic stimulus packages, HomeBuilder comes with some specific rules around eligibility:

  • To access the grant, applicants must be Australian citizens over the age of 18, who earned under $125,000 a year as an individual based on their 2018-19 or 2019-2020 taxable income, or a couple who earned less than $200,000 per annum based on their combined 2018-19 or 2019-20 taxable income.
  • If building a new home as a principal place of residence, an individual or a couple must enter into a contract between June 4 and December 31, 2020, where the property value (house and land) does not exceed $750,000.
  • Or, they must enter into a contract between June 4 and December 31 to substantially renovate an existing home as a principal place of residence, where the work is valued between $150,000 and $750,000, and where the value of the existing property (the house and land, before renovation) does not exceed $1.5 million.

It’s important to note that owner-builders and those building or renovating rental properties are ineligible for HomeBuilder.

In negotiating a building contract eligible for the grant, both parties must “deal with each other at arm’s length”. This means the property owner and the builder or renovator must be independent parties without any kind of “special relationship”, such as being related.

Renovations or building work must be undertaken by a registered or licenced building service ‘contractor’ (the exact definition of this will depend on the state or territory you live in), who is named as a builder on the building licence or permit.

If you’re applying for the grant to pay for renovations, they must be undertaken in order to improve the accessibility, safety or liveability of the dwelling. The grant doesn’t cover standalone granny flats, swimming pools, tennis courts and structures that are not connected to the property (like outdoor spas and saunas, sheds or standalone garages).

Is everything proceeding according to plan?
Treasury, the government department responsible for the new scheme, reported that it had received over 35,000 expressions of interest regarding applications at the end of June. The grant applications – and their management, assessment and potential approval – will be managed by state agencies.

At the end of June, only South Australia, Tasmania, Western Australia and the Northern Territory have officially announced that they’re taking part in the scheme. When it comes to other states, it seems to be a case of ‘wait and see’, with Victoria, New South Wales and Queensland advising that more information will be available soon.

“Victoria is believed to be close to signing, but New South Wales and Queensland have expressed concern about the administrative burden it will place on state departments that are already running state COVID recovery schemes, bushfire recovery schemes and first homeowner grants,” as explained in The Guardian on June 30.

How do I apply?
You will be able to apply for HomeBuilder through your relevant state or territory revenue office or equivalent authority – once the state or territory you live in (or plan to live in) signs the National Partnership Agreement.

States and territories will backdate acceptance of HomeBuilder applications to 4 June 2020 once they have agreed to take part in the scheme. If you have specific questions about your personal circumstances and the grant, click here to download the Department of Treasury Frequently Asked Questions document.

If you are wanting to see if you are eligible for the HomeBuilder’s grant or discuss how you can borrow to build your dream house, or renovate your current house, contact the team at Crest Mortgages & Finance today.

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