What Is The HomeBuilder Grant?

What is the HomeBuilder grant?

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

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.

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.
• 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.

Unfortunately, property investors and owner builders are not eligible.

How much is the HomeBuilder grant in each state?

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

When should I sign the contract to get HomeBuilder?

The grant will only be available for contracts that are signed between 4 June 2020 to 31 December 2020.

Furthermore, the construction or renovation must start within three months of the contract date.

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.

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.

Can HomeBuilder be used as a deposit?

At the moment, lenders have not updated their policies on whether HomeBuilder grant will be accepted as a deposit.

As soon as their policies are announced, we will update this page.

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

While you could get a deposit from grants, these are only issued when the house is being built, so you will need a deposit when you buy land.

You can use a guarantor loan to make up for the deposit.

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.

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

State	HomeBuilder Grant	First Home Owners Grant	First Home Loan Deposit Scheme	Total grant available*
New South Wales	$25,000	$10,000	LMI waived for first home buyers	Up to $45,000
Victoria	$25,000	Between $10,000 – $20,000	LMI waived for first home buyers	Between $45,000 to $55,000
Queensland	$25,000	$15,000	LMI waived for first home buyers	Up to $50,000
Western Australia	$25,000	$10,000	LMI waived for first home buyers	Up to $45,000
South Australia	$25,000	$15,000	LMI waived for first home buyers	Up to $50,000
Australian Capital Citys	$25,000	No grant, but concession scheme available	LMI waived for first home buyers	Up to $35,000
Northern Territory	$25,000	$10,000	LMI waived for first home buyers	Up to $45,000
Tasmania	$25,000	Up to $20,000	LMI waived for first home buyers	Up to $55,000

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

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

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.

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 in 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.

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.

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 licenced 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.

Are investors eligible for HomeBuilder

Unfortunately, no.

If you’re an owner-builder, or want to build a new home to use as an investment property, then you will not be eligible for HomeBuilder grant.

Furthermore, the grant cannot be used for renovation of an investment property.

What if I’m not eligible for the grant?

For first home buyers, there are other existing state grants available like the First Home Owners Grant, First Home Loan Deposit Scheme and stamp exemptions and concessions.

Even if you don’t qualify for the HomeBuilder grant, we have lenders on our panel that can help you get a renovation loan or a construction loan.

Our mortgage brokers are experts in all types of construction loans, including home loans to renovate an existing home.

Please call us on 1300 889 743 or complete our free assessment form and we will go through your options with you.

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