HomeBuilder grant.

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The Federal Government has announced a new program to help Australians buy or renovate a home. Find out if you’re eligible for the $25,000 grant.

The Commonwealth HomeBuilder grant provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home. It’s designed to stimulate the Australian economy through assistance to the residential construction market which encourages the start of new home builds and renovations.

Whether you’re a first home buyer, seeking to knockdown and rebuild; upsize or downsize, or looking to substantially renovate your existing home, to help you make an informed decision, we’ve unpacked the HomeBuilder grant program in this article.

What is the HomeBuilder grant?

The HomeBuilder grant provides $25,000 cash to eligible owner-occupier applicants that are either building a new home, or substantially renovating an existing home. Eligible homeowners need to purchase a new home valued under $750,000 or spend between $150,000 to $750,000 on renovations of a property valued up to $1.5M. 

Wondering if you qualify for the HomeBuilder grant?

To be eligible for the HomeBuilder grant owner occupiers must meet the following criteria:

  • Be an Australian citizen aged 18 and older
  • Be an individual – not a company or trust
  • Meet the income test. Being on an income of less than $125,000 per annum for an individual, or $200,000 per annum as a couple (based on 2018/19 tax return or later)
  • Enter into a building contract from 4 June 2020 up to 31 December 2020 with a licensed or registered builder, so you cannot be an owner builder or use a contract from earlier in the year even if construction hasn’t started yet. Construction must commence on or after 4 June 2020 and within 3 months of the building contract date.
  • Be either building a new property; buying an off the plan apartment or townhouse or looking to substantially renovate the existing home that you live in.
    • Build a new home, where the total value can be up to $750,000; or
    • For buying an off the plan property, construction needs to start on or after 4 June 2020 (and no later than 3 months after the contract is signed). 
    • Substantially renovate a home, where the total spend is between $150,000 to $750,000, and where the value of the existing home and land pre-renovation is less than $1.5 million. The funds may only be used for renovations that are connected to the home, like renovations to the kitchen or bathroom. You can’t use the funds for additions that aren’t connected to the home, like swimming pools, sheds, garages, tennis courts, etc.
  • Agree to use a registered or licensed builder to carry out the work, and construction must commence within three months of construction contract date.

I’m a first home buyer, is the HomeBuilder grant available to me?

Yes, the HomeBuilder grant is available for eligible first home buyers. However, you don’t need to be a first home buyer to get the $25,000 HomeBuilder grant, provided you meet the eligibility criteria listed above. You do however need to be living in the property for it to meet the criteria, so you won’t qualify if the funds are for an investment property. 

Is the income limit, based on my gross or net income?

The income test for the HomeBuilder grant is similar to the First Home Loan Deposit Scheme:

  • singles – your taxable income for the previous financial year (2018/19 tax return or later) must not be more than $125,000.
  • couples – your combined taxable income for the previous financial year (2018/19 tax return or later) must not be more than $200,000.

The government in the HomeBuilder FAQs have confirmed that the way to prove your taxable income is via your notice of assessment as issued by the Australian Taxation Office (ATO). Taxable income is the income your tax in calculated on. Visit the ATO to understand more about taxable income.

How to apply for the HomeBuilder Grant.

All states and territories are now accepting applications for HomeBuilder. Contact your relevant State or Territory authority for information on how to apply for the HomeBuilder grant.

HomeBuilder Grant Eligibility scenarios.

The following eligibility scenarios have been adapted from the Australian Government’s HomeBuilder Fact Sheet.

Scenario 1: Owner occupiers Darla and Lucas.

Darla and Lucas decide to build a new home on a vacant block of land that they already own. The value of the vacant block is $500,000 and the building contract that Darla and Lucas sign is for $300,000. Darla and Lucas entered into the building contract on 4 August 2020 and made the first progress payment when construction commenced on 4 September 2020. Darla and Lucas apply for HomeBuilder via the relevant State or Territory government which conducts the eligibility checks and confirms that both are Australian citizens, over the age of 18, have a combined taxable income under $200,000 based on their 2018-19 tax returns, the value of the property (house and land) is less than $750,000, the contract was signed on or after 4 June 2020 and before 31 December 2020, and they’ve made the first progress payment. The State or Territory government approves the application. As Darla and Lucas are not first home buyers, they are not eligible for the First Home Owner Grant, the First Home Loan Deposit Scheme or the First Home Super Saver Scheme.

 Scenario 2: First Home Buyer Aleena decides to purchase a house and land package.

First home buyer Aleena has been saving for several years to buy her first home. Aleena entered into a house and land contract for $575,000 on her birthday, 28 September 2020. This year will be a truly memorable birthday, for all the right reasons. Aleena applies to the relevant State or Territory revenue office to receive the HomeBuilder $25,000 grant. The revenue office conducts the eligibility checks and reviews her documentation and confirms that Aleena is an Australian citizen, over the age of 18, has a taxable income under $125,000 based on her 2018-19 tax return and the value of the contract is under the $750,000 contract price cap.

As Aleena is also a first home buyer, she may also be entitled to her State’s First Home Owner Grant and stamp duty concessions as well as the Australian Government’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.

Scenario 3: Chris and Davinder decide to knockdown and rebuild their existing home.

Owner occupiers Chris and Davinder want greater space for their growing family. They decide to knockdown and rebuild their existing home.  Chris and Davinder entered into a building contract to knockdown and rebuild their existing home on 24 September 2020, with the knockdown and rebuild contract valued at $450,000. The value of the property is $850,000 (including the current value of the dwelling and land). The couple pay the licensed builder $20,000 to commence the knockdown and rebuild on 24 November 2020. Chris and Davinder apply to the relevant State or Territory revenue office to receive the HomeBuilder $25,000 grant.

The revenue office conducts the eligibility checks and confirms that the couple own the property, are Australian citizens, over the age of 18, have a combined taxable income under $200,000 based on their 2018-19 tax return, and the value of their existing home and land pre-renovation is less than $1.5 million.

The building contract is also within the HomeBuilder renovations price range (between $150,000 and $750,000) and the couple have made the first progress payment on the renovations. The revenue office approves the application. As Chris and Davinder already own their home, they are not eligible for the First Home Owners Grant, the First Home Loan Deposit Scheme or the First Home Super Saver Scheme.

Scenario 4: Mai decides to substantially renovate her home.

Mai enters into a contract on 31 December 2020 to substantially renovate her home, with renovations valued at $500,000. The value of her home is $850,000 (this includes the value of the house and the land). Mai agrees to pay the licensed builder $170,000 of the cost of renovation of her home on 2 February 2021. Mai then applies directly to her State or Territory to receive the $25,000 HomeBuilder grant. The State or Territory conducts the eligibility checks and confirms that Mai owns the property, is an Australian citizen, over the age of 18, and has a taxable income under $125,000 based on her 2019-20 tax return. The State or Territory also confirms the value of the renovations is between $150,000 and $750,000, and the value of her home (house and land) is less than $1.5 million prior to the renovation, and Mai has made a payment of at least $150,000 for the renovations. The State or Territory approves the application. As Mai already owns her own home, she isn’t eligible for the First Home Owner Grant, the First Home Loan Deposit Scheme or the First Home Super Saver Scheme.

Find out more:

 

This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice. ©Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.


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Lali Wiratunga

Lali Wiratunga believes in encouraging positive financial behaviours to boost people’s financial confidence. He also advocates for the role of innovation, creativity and entrepreneurship in helping people and organisations deliver social impact and financial sustainability. In 2016, Lali was recognised for creating a positive impact through Pro Bono Australia’s Impact 25. Following a career as a corporate lawyer and management consultant in the UK, he's had 14 years experience in roles across financial services in Australia. His volunteer roles include a seat on the Board of TAD, a disability services organisation, and is a member of the Alumni Advisory Board at UNSW Business School, where he mentors students and advocates for the value of business education.

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