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HomeBuilder scheme explained

30/06/2020

More information on the HomeBuilder scheme and how you can apply.

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If you’ve dreamt about making significant upgrades to your house but the finances haven’t stacked up, the government’s new HomeBuilder scheme might be able to help.

Announced in June, the HomeBuilder scheme provides $25,000 tax-free grants to eligible owner occupiers looking to build or substantially renovate their home.

The goal, of course, is to jumpstart the residential construction sector, which has fallen on hard times since the coronavirus pandemic struck.

But it will also give Australians who might have sidelined their building or renovation plans a chance to see those plans through.

To qualify for the scheme, individuals must be earning less than $125,000, and couples must have a combined income of less than $200,000.

While HomeBuilder is demand-driven and uncapped, the government estimates 27,000 grants will be handed out, putting the total cost of the scheme at around $680 million.

What are the requirements?

  • If you are building a new home, the value of the property must not exceed $750,000
  • If you are renovating your existing home, the value of your property must not exceed $1,500,000
  • The total cost of renovations must be between $150,000 and $750,000. Grants cannot be used for outdoor fixtures like swimming pools, sheds, and tennis courts.
  • Construction must be undertaken by a registered or licensed builder
  • Building contracts must be signed between 4 June 2020 and 31 December 2020
  • Construction of your new home or renovations of your existing home must commence within three months of the building contract date.

How do you apply?

All applications will have to go through the relevant State or Territory revenue office. If you’re interested, get in touch with the one where you live (or plan to live) to see if you're eligible.

You’ll need a few documents handy, including your 2018-19 (or 2019-20) tax return, the contract dated and signed by you and the builder, and the builder’s registration or license.

Your local revenue office will alert you if your application is successful, and the government will backdate the acceptance of your application to 4th June 2020 once everything is finalised.

Can HomeBuilder be used with other grants?

Yes. The HomeBuilder grant can be used in conjunction with other housing grants, provided you tick the necessary boxes.

For example, Nathan and Hannah have just purchased a house and land package and plan to build their first home.

They are both Australian citizens, above the age of 18, and their combined income does not exceed $200,000. What’s more, the house and land have been valued at less than $750,000.

As they are first home buyers, they could receive support in the form of their state’s first home owner grant and stamp duty concessions.

They will also be able to apply for government initiatives like the First Home Loan Deposit Scheme and the First Home Super Saver Scheme.

What kinds of renovations are eligible?

If you’re renovating, keep in mind that the total cost must be between $150,000 and $750,000, so if you’re only looking to swap out your kitchen cabinets you probably won’t qualify.

Generally, renovations must “improve the accessibility or safety or liveability of the property,” so things like tennis courts, swimming pools and outdoor spas aren’t eligible.

Structures that aren’t connected to the property, like granny flats, sheds and garages, are also excluded.

Niko Iliakis is a personal finance writer and journalist at financial comparison site mozo.com.au

Terms, conditions and eligibility criteria apply. This article is intended to provide general information of an educational nature only. This information has been prepared without taking into account your objectives, financial situation or needs. Therefore, before acting on this information, you should consider its appropriateness having regard to these matters and the product terms and conditions. Information in this article is current as at the date of publication.

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