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.
Summary details of HomeBuilder grant
|What is the eligibility criteria for HomeBuilder?||Maximum property value for renovation is $1.5 million.
The cost of a new build is equal to or less than $750,000.
The renovation cost is between $150,000 to $750,000.
|Are there any income caps?||For individuals, the income is equal to or less than $125,000 in FY19.
For couples, the income is equal to or less than $200,000 in FY19.
|What if my partner is not an Australian citizen?||Both applicants have to be Australian citizens to be eligible for the grant. Temporary or permanent residents do not qualify.|
|Can I use HomeBuilder as a deposit?||5% – 10% deposit is required, unless you have a guarantor or equity in an existing property. The grant can be used to fund part of the cost of construction.|
|When should the building contract be signed?||Between 4 June 2020 to 31 December 2020|
|When should renovation or construction start?||Within 3 months of signing the building contract|
|When do I get the grant?||Once construction or renovation starts.|
|Can owner-builders apply for HomeBuilder?||No, owner builders are not eligible for HomeBuilder. Investors are also not eligible.|
|Is HomeBuilder only available for first home buyers?||No, HomeBuilder is available for first home buyers and existing homeowners.|
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.
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.
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.
When will I receive 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 grant will be paid when construction has commenced. Typically, grants are processed via your lender and paid directly to your builder. If you do not have a lender you can apply directly with your state government.
These offices will backdate the HomeBuilder applications to 4 June 2020 once the National Partnership Agreement is signed.
When will the grant be paid?
- For land and construction or a new build, the HomeBuilder grant will be paid at slab stage.
- For renovations, the HomeBuilder grant will be paid after $150,000 has been spent.
- For off the plan, the grant might be paid when during total payment at settlement.
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.
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.
While you could get a deposit from grant(s), these are only issued when the house is being built, so you will need a deposit when you buy the land.
If you are building a home, then you will need some savings of your own even with government grants. However, if you have a guarantee from your parents secured on their property then you can buy and build without any savings.
What dwellings are eligible for HomeBuilder?
The following dwelling types are accepted if the applicant meets the eligibility criteria:
- 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.
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?
Furthermore, the contract signed between you and the builder is done at arm’s length. It is done freely and independently which means, if the builder is your relative, then he/she cannot be used as a builder under HomeBuilder.
How much is the HomeBuilder grant in each state?
The HomeBuilder grant for each state is $25,000.
Can I use HomeBuilder with other state grants?
Here’s a summary of the grants available in each state:
|StateHome||Builder Grant||First Home Owners Grant||First Home Loan Deposit SchemeTotal||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 City||$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.
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 3 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.
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.
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?
The renovations done must be attached to your existing home to be eligible for HomeBuilder.
This means the grant cannot be used to add additions to your home like detached sheds and garages.
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.
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.
Frequently Asked Questions
Why does construction have to start within 3 months of signing the building contract?
With HomeBuilder, the federal government is spearheading existing construction or renovation projects that were put on hold due to the coronavirus pandemic.
By allowing the 3 months time frame, it helps builders and homeowners who already had projects planned, rather than just focusing on new builds or renovations.
The Prime Minister gave the following comments regarding this, “This isn’t for do-it-yourself home renovations, this is about approved work by certified builders of significant scale to enable people to bring forward projects that they have put off and can now proceed with.”
The three month time frame to commence construction will be a challenge for people who did not already have plans to build and we recommend that you discuss this with your builder, architect and other professionals assisting you.
What if the work cannot start 3 months from signing the contract?
It might be better to wait and sign the building contract once the necessary steps and precautions are taken so you can start construction or renovation within 3 months.
Some states might allow a builder and a client to enter into a preliminary agreement to ensure things are in order before signing a building contract.
If the delay is caused due to building approvals or finance approvals, then states and territories might exercise discretion.
Should I terminate and sign a new one to take advantage of HomeBuilder?
If you’ve signed a contract before 4 June 2020, then you will not be eligible for the grant.
You could terminate the contract and sign a new building contract between 4 June to 31 December 2020.
However, a few minor things will have to be considered for the new contract to be accepted for HomeBuilder.
Furthermore, if you terminate your existing contract, it could have the following consequences:
- If your finance is already approved, you will have to go through the approval process again with the new contract.
- There is uncertainty on whether the new contract will be accepted by the state and territory offices of revenue as they have yet to finalize the details on its operation and implementation.
- Each state and territory have their own guidelines regarding terminating a building contract.
- There could be issues with your warranty insurance once your building contract is terminated.
It’s best to speak to your builder before you make the decision to terminate and sign a new contract to use the HomeBuilder grant.
Can I refinance my loan to finance renovating or building?
Please contact us on 1300 889 743 or enquire online and one of our mortgage brokers will call you to discuss your eligibility and options.
Can I access my redraw facility and/or my offset account to finance the construction?
Are investors eligible for HomeBuilder?
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.
The WA government’s additional grant is available to investors if you are building in WA.
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.
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.