How you can make the most of the $25,000 HomeBuilder grant

This month, the Federal Government announced the HomeBuilder program – a grant for eligible first home buyers and owner-occupiers building or substantially renovating their new or existing homes.

The grant aims to stimulate the construction industry, which has taken a hit during the COVID-19 crisis.

Danni Hunter, CEO of the Victorian branch of the Urban Development Institute of Australia (UDIA) outlined at the beginning of COVID-19 lockdowns; “The property, construction and development industry employs more than 1.4 million Australians – more than manufacturing and mining combined – so it is critical to think through what happens in the event that building sites are shut down for a period of time. How can we get them operating productively again as quickly as possible?”

While many building sites were able to remain open and operating as an essential service, residential builders certainly felt the mounting pressure of current market uncertainty, which is what led the government to develop this grant program.

Who is eligible for the $25,000 HomeBuilder grant?

According the the Federal Government fact sheet, to access HomeBuilder, owner-occupiers must meet the following eligibility criteria:

• you are a natural person (not a company or trust);
• you are aged 18 years or older;
• you are an Australian citizen;
• you meet one of the following two income caps:
  - $125,000 per annum for an individual applicant based on your 2018-19 tax return or later; or
  - $200,000 per annum for a couple based on both 2018-19 tax returns or later;
• you enter into a building contract between 4 June 2020 and 31 December 2020 to either: 
  Build a new home as a principal place of residence, where the property value (house and land) does not exceed $750,000; or substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property (house and land) does not exceed $1.5 million;
• construction must commence within three months of the contract date.

Owner-builders and those seeking to build a new home which will be used as an investment property, or renovate an existing home which is an investment property, will not be eligible for HomeBuilder. 

Developers are also releasing their own incentives on top of the HomeBuilder grant, including Blue Earth, DealCorp and Castran Gilbert. The Blue Earth Home Buyer Bonus is $25,000, is not means tested, applies to both investors and owner occupiers, and is completely unrestricted. Eligible homeowners can now take advantage of DealCorp’s offer to double the HomeBuilders grant from $25,000 to $50,000. Castran Gilbert is also matching the grant with $25,000 for a limited time, available to eligible purchasers.

If you already own a block of land but haven’t already signed a contract to build your home, you may also be eligible:

If you own a property (house and land), and knock the house down to rebuild – this will be counted as a substantial renovation, and therefore subject to the renovation price range of $150,000 to $750,000 provided the total value (house and land) of the property does not exceed $1.5 million pre-renovation;

• If you own vacant land before 4 June 2020, and then build, the total value of the land and new build cannot exceed $750,000; or
• If you buy the land after announcement, and then build, the total value of the land and build cannot exceed $750,000.

Click here for more eligibility information. 

How to apply for the HomeBuilder grant.

You should contact your relevant State or Territory authority to find out when and how to apply for HomeBuilder, such as Revenue NSW or the Queensland Government website. You will be able to apply for HomeBuilder when the Government of the State or Territory that you live in, or plan to live in, signs the National Partnership Agreement with the Commonwealth Government. Keep an eye on these pages for further information on how to apply. 

As outlined on their website, “Revenue NSW is working to open the HomeBuilder grant for eligible NSW owner-occupiers as soon as possible. We will update our website with more information on the HomeBuilder grant application process as soon as it becomes available.”

Click here for more application information. 

The Government put in place further “final touches” to the HomeBuilder scheme last week, which were welcomed by the Housing Industry Association (HIA).

These there three key refinements include:

Allowing the necessary time for home buyers to arrange their finance approvals, building approvals and meet other legal requirements before work is required to commence, rather than the fixed three-month timeframe initially announced.

Clarifying that a sales contract for a home purchased off-the-plan will be eligible in the same way as a building contract.

Aligning the process with the current timing of payments for first homeowner grants for new homes.

“The HomeBuilder grant has already boosted interest in buying a new home or carrying out a renovation project. The new details will make this interest even stronger,” said Kristin Brookfield, HIA chief executive of industry policy.  

“These updates will give greater certainty to home buyers and their builders about what projects potentially qualify for the grant.”

For more market insights, click here.