Everything you need to know about Australia's $25,000 HomeBuilder grant + how much off-the-plan homebuyers could save

Everything you need to know about Australia's $25,000 HomeBuilder grant + how much off-the-plan homebuyers could save
Everything you need to know about Australia's $25,000 HomeBuilder grant + how much off-the-plan homebuyers could save

As a means to recuperate financial losses caused by the COVID-19 pandemic, the Federal Government has announced a stimulus package for the construction industry – with its benefits extending to home buyers and property owners. 

The Government plan to distribute approximately $688 million worth of funding as $25,000 HomeBuilder grants, which eligible owner-occupiers can apply for to build a new home or substantially renovate an existing property. This funding also includes the purchasing of brand new off-the-plan properties

HomeBuilder will endeavour to reinvigorate the residential construction industry, providing a boost in work opportunities and bringing financial relief.

When is the HomeBuilder grant available?

Contracts entered into between 4th June 2020 and 31st December 2020. The building work must commence within three months of the contract date.

Is the HomeBuilder grant compatible with First Home Buyer Grants and Stamp Duty Concessions?

Applicants may apply for the HomeBuilder grant in conjunction with other grants (such as the First Home Buyer Grant and Stamp Duty concessions), as well as the Commonwealth's First Home Loan Deposit Scheme and First Home Super Saver Scheme.

Why has the HomeBuilder grant been established?

Offering the HomeBuilder grant is a Federal initiative that will aim to support more than 1 million builders, painters, plumbers and electricians whose work has been impacted by COVID-19. 

Who is eligible for the HomeBuilder grant?

Applicants must be an owner-occupier who meets the following criteria:

  • you are an individual, not a company or trust; o you are aged 18 years or older; 
  • you are an Australian citizen; o you meet one of the following two income caps: 
    • $125,000 per annum for an individual applicant based on 2018/19 tax return or later; or 
    • $200,000 per annum for a couple based on your combined on 2018/19 tax return or later; 
  • you enter into a building contract between 4th July 2020 to 31st December 2020 to either: 
    • build a new home as a principal place of residence valued up to $750,000 (including land); or 
    • substantially renovate your existing home as a principal place of residence, with renovations valued at between $150,000 and $750,000 with the dwelling not valued at more than $1.5 million before the renovation; 
  • construction must be contracted to commence within three months of the contract date.

*Source: HomeBuilder, Frequently Asked Questions

What are some of the HomeBuilder grant restrictions?

Applicants cannot owner-build a new home or use the grant to renovate an investment property. 

Work must be carried out by a licensed contractor who has held sufficient registration prior to the date of the funding announcement. 

Who receives the money?

Funding will go to individuals, not contractors. 

I found an off-the-plan property on Urban that I'd like to buy. Am I eligible?

Good news, the grant does extend to off-the-plan purchases, so long as you sign your contract between the period of 4th June 2020 to 31st December 2020 and meet the eligibility criteria. 

According to Treasury.gov.au,

"All dwelling types (house, apartment, house and land package, off-the-plan, etc) are eligible under HomeBuilder, in accordance with the requirement that the owner-occupier must contract to build a new dwelling or substantially renovate their existing dwelling. The applicant must also meet the eligibility requirements outlined above."

Are there any off-the-plan funding restrictions?

The Government has noted that a national price cap of $750,000 will apply to new build homes. That means the total value (land + property) must not exceed $750,000 to be eligible for the grant. 

Is the HomeBuilder grant taxed?

According to Treasury.gov.au, no, the grant will not be taxed. 

How much could I save on my off-the-plan purchase?

HomeBuilder, coupled with additional grants applicable depending on where you live, could see significant savings off your off-the-plan purchase. The only catch is that you purchase your new home by New Year's. 

VICTORIA - Up to between $45,000 and $55,000

NEW SOUTH WALES - Up to $45,000

QUEENSLAND - Up to $50,000

SOUTH AUSTRALIA - Up to $50,000

AUSTRALIAN CAPITAL TERRITORY - Up to $35,000

NORTHERN TERRITORY - Up to $45,000

TASMANIA - Up to $55,000

WESTERN AUSTRALIA - Up to $45,000

*Source: news.com.au

How do I apply?

You can apply through your state or territory revenue office here:

VICTORIA

NEW SOUTH WALES

QUEENSLAND

SOUTH AUSTRALIA

NORTHERN TERRITORY

TASMANIA

WESTERN AUSTRALIA

This article is based off information sourced from the Australian Government Treasury website on 4th June 2020. Should you wish to clarify any information listed in this article, reach out to your local revenue office.

Olivia Round

Olivia Round

Olivia Round is the Features Editor of urban.com.au. Olivia specialises in news reporting, in-depth editorial content and video + podcast interviews with industry experts.

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polontang
Regarding to the HomeBuilder grant, 1) can the owner-occupied property ever become an investiment property? 2) is there a minimum duration before this owner-occupied property can be sold?
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Thanks for your questions – we requested this information from the Treasury office who explained that yes, it can eventually become an investment property, but you must live in the property first as the HomeBuilder Grant is designed to align with existing state and territory first home buyer and stamp duty concession schemes. They also said it is expected that you will continue to live at the property (as your principal place of residence) for at least 6 months, however, this will be at the discretion of the relevant state or territory authority. Let me know if you have any other questions about the HomeBuilder Grant or eligible off-the-plan properties.
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rpurtill-EdUynZdGWL
Good morning Olivia, my son aged 22 would like to purchase an off the plan or ready to commence unit say to the value of 300 to 350K in and around Brisbane but is having trouble finding the appropriate unit developments. From you comments I assume he can apply ( unit rather home ) based on the criteria outlined. Look for ward to hearing from you. Thanks Russ
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