HomeBuilder Grant

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What is the HomeBuilder grant?

It is a $25,000 tax-free grant given to eligible owner-occupiers, including first home buyers.

With the HomeBuilder extension, contracts signed between 1 January 2021 and 31 March 2021 are eligible for a $15,000 grant.

The grant can be used to:

• Build a new home
• Renovate an existing home

The HomeBuilder grant is a federal scheme designed to help the Australian residential construction market continue business in the wake of the Coronavirus.

Extension Of Deadline To Submit Supporting Documents

The deadline for submitting supporting documents for the HomeBuilder scheme has been extended. You now have more time to apply and can submit your documents by 30 June 2025. The extension is because of supply constraints and delays in the construction industry. However, please note that the extension only applies to those who have already received formal approval for off-the-plan purchases or renovations under the HomeBuilder scheme

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Construction timeframe extended

The applications for the HomeBuilder grant closed on 14 April 2021.

However, on 17 April 2021, the government announced that the construction commencement requirement is extended from 6 months to 18 months for all existing applicants.

The government extended the timeframe for construction commencement in response to the unanticipated delays caused by supply constraints because of the pandemic and other recent natural disasters.

The construction extension is applicable for those who had signed contracts between 4 June 2020 and 31 March 2021.

HomeBuilder Extension

The Treasurer announced that the HomeBuilder grant will be extended to 31 March 2021.

The grant was originally available until 31 December 2020.

The extended HomeBuilder applications will be accepted under the new criteria:

• The HomeBuilder grant is $15,000 for new builds and substantial renovations signed between 1 January 2021 and 31 March 2021.
• The property price threshold for new build contracts for New South Wales is $950,000 and for Victoria, it is $850,000. The existing price cap of $750,000 will continue for the remaining States and Territories.
• Applications must be submitted to the respective State Revenue Office by 14 April 2021.
  
• For contracts signed on or after 29 November 2020, the builder/developer must have a valid license or registration before 29 November 2020. For contracts signed before 29 November 2020, they must have a valid license before 4 June 2020.

Summary details of HomeBuilder grant

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Who is eligible for the HomeBuilder grant?

The grant is available for first home buyers and existing homeowners. To qualify for the HomeBuilder grant:

• You must spend at least $150,000 (and up to $750,000) on home renovations.
• The value of the property you’re renovating must not exceed $1.5 million.
• For new builds, the value of the property must not exceed $750,000. With the grant extension, the property price thresholds for NSW and Victoria have increased to $950,000 and $850,000 respectively.
• You must be 18 years or older.
• Only Australian citizens can apply. (Companies and trusts are not allowed).
• The construction must start within three months of the building contract date.

You have to enter the HomeBuilder scheme between 4 June 2020 to 31 December 2020. It has now been extended to 31 March 2021.

Unfortunately, property investors and owner builders are not eligible.

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What are the HomeBuilder income caps?

The income caps to qualify for the grant are:

• Singles must be earning $125,000 or less based on their 2018/19 tax return or later.
• Couples must have a combined income of no more than $200,000 based on their 2018/2019 tax returns.

There is no limit to the number of people who can get the grant, but it is only available until 31 December 2020. It has now been extended to 31 March 2021.

Contact our mortgage brokers on 1300 889 743 or complete our free assessment form to see if you are eligible for HomeBuilder and to get pre-approved for a home loan today.

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How do I apply?

The HomeBuilder grant will be implemented via a National Partnership Agreement, which is signed by the Commonwealth and State and Territory governments.

Therefore, you will apply for the grant with the state or territory that you live in or plan to live in once the agreement is signed.

We have created a comprehensive guide on how to apply for the HomeBuilder grant in each state.

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What documents do I need to provide?

At the minimum, the following documents are needed when applying for the HomeBuilder grant:

• Proof of identity.
• Copy of contract that is signed and dated by you and the registered or licensed builder.
• Copy of builder’s registration or licence.
• Copy of your 2018-19 tax return to demonstrate income cap eligibility.
• Other documents like council approvals, building contracts, evidence of land value.

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When will I receive the HomeBuilder grant?

While it is a nationwide scheme, the grant amount will be paid by the relevant state or territory if you meet the eligibility criteria. The relevant State or Territory revenue office will distribute the $25,000 (or the $15,000) grant directly to the applicant.

When will the grant be paid?

• For land and construction or a new build, the grant will be paid once construction starts and you’ve submitted evidence that the first progress payment has been made.
• For renovations, the grant will be paid once renovation starts and you’ve submitted evidence to show progress payments of at least $150,000 of the contract price has been made to the builder.
• For off the plan or buying a new home, the grant will be paid once you’ve submitted evidence that the property is registered in your name on the title.

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Can HomeBuilder be used as a deposit?

Unfortunately, HomeBuilder cannot be used as a deposit.

A major bank has confirmed that the HomeBuilder grant cannot be used as 5% genuine savings.

You will still require a 5% – 10% deposit for a construction loan unless you’re applying with a guarantor or have equity in an existing property.

You will need funds of your own, especially if you’re buying land and building on it.

You will still require a 5% – 10% deposit for a construction loan unless you’re applying with a guarantor or have equity in an existing property.

You will need funds of your own, especially if you’re buying land and building on it.

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Can HomeBuilder be used as funds to complete?

HomeBuilder grant pre-approvals are available in Queensland, Tasmania and South Australia. The grant can be treated as funds to complete if the applicant gets pre-approval from these states or territories.

For Tasmania, pre-approval will only be available for off the plan purchases.

The HomeBuilder grant cannot be used as funds to complete in New South Wales, Victoria, Western Australia, Australian Capital Territory, and also for off the plan purchases in Queensland and South Australia.

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What dwellings are eligible for HomeBuilder?

The following dwelling types are accepted if the applicant meets the eligibility criteria:

• House
• Apartment
• Land package
• Off the plan
• Building on vacant land
• Pre-fabricated houses are also considered for HomeBuilder if the construction is undertaken by a licensed builder and meets all the other eligibility requirements.

If you’re renovating your property:

• Renovation must commence within three months of the contract date.
• It must improve the accessibility, liveability and safety of the property. Therefore, renovations like a swimming pool, tennis court, shed, etc. are not allowed.
• The renovation must be completed by a licensed or registered builder.

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What builders can I use?

When selecting a builder for your renovation or construction, consider the following:

• Is the builder licenced or registered? To be eligible for the grant, the builder must be registered.
• Does the builder hold a building licence or endorsed contractor licence before 4 June 2020? For contracts signed on or after 29 November 2020, the builder/developer must have a valid licence or registration before 29 November 2020.

Furthermore, the contract signed between you and the builder must be made at arm’s length. It must be done freely and independently, which means, if the builder is your relative, then he/she cannot be used as a builder under HomeBuilder.

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How much is the HomeBuilder grant in each state?

The HomeBuilder grant for each state is $25,000.

If the contract is signed between 1 January 2021 and 31 March 2021, the HomeBuilder grant for each state is $15,000.

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Can I use HomeBuilder with other state grants?

Yes, the HomeBuilder grant can be used with existing state grants like First Home Owners Grant and even the First Home Loan Deposit Scheme if you’re an eligible first home buyer.

Here’s a summary of the grants available in each state:

*Please note that the LMI waiver (FHLDS) for first home buyers is estimated at $10,000. Separate qualifying criteria apply, and the value of the benefit will vary depending on your situation.

**The table shows HomeBuilder grant details for contracts signed between 4 June 2020 and 31 December 2020. For contracts signed between 1 January 2021 to 31 March 2021, the HomeBuilder grant is $15,000.

We’ve also created a comprehensive guide for first home buyers to help them buy their first home.

Tasmania home builder grant

The Tasmania government has committed to grant $20,000 for owner-occupiers to build a house.

The construction needs to commence within three months of signing the contract and you the build will have to be completed within 18 months.

Please visit Tasmania’s government website for more information.

Western Australia’s ‘Building Bonus Package’ grant

The $20,000 ‘Building Bonus Package’ grant in Western Australia is available for both owner-occupiers and investors for new builds.

Homebuyers who purchased a single-storey property, which was already in construction can also apply.

The grant is limited to new home builds and not renovations.

This is a great option for investors from other states who are looking to gain access to a construction grant.

Please visit Western Australia’s website for more information.

Queensland’s Regional home building boost grant

The $5,000 grant is available for the purchase or construction of a brand new house, unit or townhouse valued at less than $750,000.

The contract must be signed between 16 June 2020 to 31 December 2020.

The grant is only available for regional areas of Queensland like Cairns, Townsville, etc.

Please visit the Queensland government’s website for more information on eligibility and how you can apply.

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Is the grant available for permanent residents?

The HomeBuilder grant is only available for Australian citizens; therefore permanent or temporary residents will not be eligible for HomeBuilder. Furthermore, if you’re applying with a partner, then both of you have to be Australian citizens to be eligible for the grant.

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What can be renovated using HomeBuilder?

The renovation must be to improve the accessibility, safety and liveability of your home.

Therefore, you can use the grant for a combination of renovation works on your bathroom and kitchen under the supervision of a licenced or registered builder.

The grant is designed for those looking to enlarge the size of their home or doing considerable renovations internally.

You cannot use the HomeBuilder for additions or renovations that are not attached to your property like swimming pools, outdoor spas and saunas, tennis courts, detached sheds and garages.

Can I build a granny flat using HomeBuilder?

Unfortunately no.

The renovations done must be attached to your existing home to be eligible for HomeBuilder.

This means the grant cannot be used to add addition to your home like detached sheds and garages.

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Tips for HomeBuilder

• With the announcement of the HomeBuilder grants, builders and tradesmen will be very busy, so you have to act now!
• When builders get busy, they put their prices up. Construction will likely cost more if you wait more than a month.
• Get quotes from 2 – 3 builders to avoid overpaying.
• New properties such as off the plan or completed developments often see a rise in prices due to increasing demand from buyers.
• Many building materials are sourced from China and supply has been disrupted due to COVID-19. People planning to build a home should discuss this challenge with their builder and consider locally manufactured materials to avoid delays.
• Ensure the required documents are ready when you’re applying for the HomeBuilder grant.

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What are the benefits and drawbacks of HomeBuilder?

The grant provides benefits to:

• Homeowners who already have planning approval and building designs drawn up.
• People who bought a house and land package, but have yet to appoint a builder before 4 June 2020.

However, HomeBuilder grant has its drawbacks:

• The cost of the renovation must at least be $150,000 – so it might only be applicable for larger renovation projects like a knockdown and rebuild instead of basic cosmetic renovations.
• A qualified builder must sign the contract by 31 December 2020, and the renovation or construction must commence after three months.
• The planning approval process takes time. The three-month window between signing a contract and starting a build does not leave a lot of time for clients who have plans drawn up, get council approval and then get the builder to start.

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