HomeBuilder – the Government’s new $25,000 grant

The Government has announced a new $680 million HomeBuilder package designed to spark life into the residential construction industry by encouraging the building of new homes and substantial renovations.

HomeBuilder will provide a tax-free grant of $25,000 to eligible owner-occupiers to either build a new home or to substantially renovate an existing home where a building contract is entered into between 4 June 2020 and 31 December 2020. HomeBuilder will be in addition to any state grants already in place (e.g. First Home Owner Grant).

It is important to note that the HomeBuilder grant does not only apply to first homeowners. All individuals who meet the eligibility criteria listed below will have access to the grant.

Who is eligible?
Owner-occupiers who are individuals are eligible if all of the following requirements are met:

• they are an Australian citizen;
• they are above 18 years of age;
• they meet one of the following two income caps:
  • $125,000 per annum for an individual applicant based on their 2018-19 tax return (or 2019-20 tax return if completed); or
  • $200,000 per annum for a couple based on both 2018-19 tax returns (or 2019-20 tax returns if completed);
• a building contract is entered into 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 an existing principal place of residence, where the value of the renovation contract is between $150,000 and $750,000, and the value of the existing house and land before renovation does not exceed $1.5 million;
• construction commences within three months of the contract date.

HomeBuilder applies to all dwelling types including houses, apartments, house and land packages and off-the-plan purchases.

The grant is also available to new homes built on vacant land already owned provided the other criteria listed above are met.

Who misses out?

• Entities – the owner-occupier must be a natural person which excludes properties owned by companies or trusts.
• Investors and owners of holiday homes – the key requirement is that the property must be used as a principal place of residence and therefore excludes investment properties and holiday homes from being eligible.
• Owner-builders – owner-builders are ineligible.
• Temporary visa holders and permanent residents – the grant is only available to Australian citizens.
• Minor renovations – the minimum spend of $150,000 prevents minor renovations from being eligible.
• Certain additions – renovations must improve accessibility, safety and liveability of the dwelling and cannot be for additions to a property such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages (unconnected to the property).