Government Grants Explained
HomeBuilder provides eligible owner occupiers with a grant of $25,000 to build a new home, substantially renovate an existing home or buy an off-the-plan home/new home. A new home is one that has not previously been sold or occupied as a place of residence (e.g. a spec build) and where construction commenced on or after 4 June 2020.
On 4 June 2020, the Australian Government announced HomeBuilder to provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home, substantially renovate an existing home or buy an off-the-plan home/new home.
While the eligible contract must be signed between 4 June 2020 and 31 December 2020 (inclusive), construction need not commence prior to 31 December 2020. However, it must commence within three months of the contract date and construction cannot have commenced before 4 June 2020.
The Australian Government HomeBuilder Grant is subject to the provisions of the National Partnership Agreement between the Victorian Government and Australian Government.
HomeBuilder complements the existing First Home Owner Grant that is available in Victoria when you buy or build your first new home.
HomeBuilder applications are to be lodged via an online portal, which will be available on our website shortly. Applications must be received by no later than 31 December 2020.
Applicant(s) can lodge their application in a multi-step process with the initial lodgement being after an eligible HomeBuilder contract has been entered into. Once commencement of construction and the payment eligibility requirement milestones have been met, any additional supporting documentation should be lodged via the online portal.
We will advise you whether your application has been approved or declined. Generally this will be within 15 working days of a complete application being received.
HomeBuilder is available to individual applicants and couples who are, or will be, registered as the owner on the certificate of title. Each applicant must be:
- a natural person (not a company or trust),
- aged 18 years or older at the date of the contract, and
- an Australian citizen at the date of application.
When you must be registered on the certificate of title as the owner of the land or property depends on the type of contract you enter into:
- For contracts to build, you must be registered on title as owner of the land by no later than the laying of foundations and the first progress payment is made.
- For substantial renovations, you must be registered on the title as owner of the property at the time that you enter into the contract for renovation works.
- For off-the-plan/new homes, you must be registered on the title as owner of the property when the building is completed and you are entitled to take possession of the home.
Applicant(s) must be below one of the following two income caps:
- $125,000 per annum for an individual based on either your 2018-19 or 2019-20 taxable income, as shown on your notice of assessment issued by the Australian Taxation Office, or
- $200,000 per annum for a couple based on either your combined 2018-19 or 2019-20 taxable income, as shown on your notices of assessment issued by the Australian Taxation Office.
A couple is considered as two people that are legally married, in a registered domestic relationship, or living as a couple on a genuine domestic basis, excluding people related to each other, e.g. siblings.
Each applicant must not have previously received the HomeBuilder Grant for any property owned individually or jointly with another person in any Australian state or territory.
Each applicant must live in the home as their principal place of residence for a continuous period of at least 6 months immediately on completion of construction, renovation or settlement.
Investment properties are excluded from HomeBuilder.
The home must be:
- located in Victoria,
- fixed to your land,
- suitable as a place of residence, and
- owned, or will be owned, by you (both dwelling and land).
HomeBuilder is available for one of the following contracts signed between 4 June 2020 and 31 December 2020 (inclusive):
- A comprehensive home building contract to build a new home as your principal place of residence where the property value (house and land) does not exceed $750,000 (inclusive of GST).
- A contract with a registered builder to substantially renovate your principal place of residence where the renovation contract is between $150,000 and $750,000 (inclusive of GST), and where the value of your existing house and land does not exceed $1.5 million. If you own a property (house and land) and demolish the house to rebuild, or your home was destroyed during the 2019-20 Victorian bushfires, these will be treated as a substantial renovation, subject to the same values.
- A contract to purchase an off-the-plan home/new home as your principal place of residence where the contract price does not exceed $750,000 (inclusive of GST) and construction had not commenced prior to 4 June 2020.
In all cases, construction cannot have commenced before 4 June 2020.
Construction must be undertaken by a registered or licensed building service contractor who is named as a builder on the building licence or permit.
Owner-builders are not eligible for HomeBuilder. An owner-builder means the person who is the registered or licensed builder and who takes legal responsibility for domestic building work carried out on their own land/property. Owner-builders therefore do not enter into an eligible contract under HomeBuilder.
For contracts to purchase an off-the-plan home/new home, construction can have commenced prior to the date of the sales contract, however not before 4 June 2020. You must also be registered on the certificate of title as the owner of the property by no later than 31 October 2022.
In negotiating the contract, the parties must deal with each other at arm’s length. This means the contract must be made by two parties freely and independently of each other and without some special relationship, such as being a relative. The terms of the contract should be commercially reasonable, and the contract price should not be inflated or deflated compared to the fair market price.
If you have entered into a contract on or after 4 June 2020 that replaces a contract made prior to 4 June 2020 to build the same or substantially similar home, you may not be eligible to receive the HomeBuilder Grant.
Construction must commence within 3 months of the contract date. Where commencement is delayed due to unforeseen factors outside the control of the parties to the contract, a maximum extension of an additional 3 months may be provided.
When construction is considered to have commenced will depend on the type of contract that you enter into:
- For new builds, commencement of construction means the commencement of excavation and site preparation works.
- For a substantial renovation, commencement of construction is when the works under the renovation contract commence.
- For an off-the-plan build, commencement of construction means the commencement of excavation and site preparation works.
Where commencement is delayed due to unforeseen factors outside the control of the parties to the contract, the applicant(s) can request a maximum extension of up to an additional 3 months by lodging a statement with supporting evidence for the Commissioner of State Revenue to consider.
On application, the Commissioner may consider exercising discretion to grant the extension in situations such as, but not limited to:
- delays in obtaining council approvals,
- difficulties in obtaining construction materials and/or sub-contractors,
- inclement weather, where the disruption is substantial,
- health problems relating to, or the death of, a person critical to the commencement of the project,
- prolonged industrial disputes, and
- natural disasters.
The Commissioner is unlikely to exercise discretion in situations such as, but not limited to:
- Where an applicant does not undertake appropriate due diligence when entering into a contract, or makes deliberate and informed choices which make them ineligible without the exercise of the Commissioner’s discretion.
- Where delay results from the builder contracting to undertake more work than they could be reasonably expected to complete in the relevant timeframe.
- Where construction is delayed because the land developer has set pre-development sales targets and insufficient blocks have been pre-sold in a subdivision.
Eligible substantial renovations
For the purposes of HomeBuilder, substantial renovations can be either:
- substantially altering the existing dwelling, or
- demolishing your home and building a new home on the land.
To be considered substantial, the renovation does not need to involve the removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases. However, it should improve the accessibility, safety or liveability of the property.
Given these requirements, a substantial renovation does not generally include:
- Stand-alone granny flats, swimming pools, tennis courts, and structures not connected to the building such as outdoor spas, saunas, sheds or stand-alone garages.
- Renovations that are primarily cosmetic in purpose such as landscaping, painting or re-carpeting.
Bushfire affected properties
If your home was destroyed in the 2019-20 Victorian Bushfires, and you are rebuilding on your existing land, your application will be considered as a substantial renovation.
HomeBuilder will be paid once the State Revenue Office Victoria is satisfied that you meet all of the eligibility criteria. The timing of the payment of the Grant will depend on whether your application relates to:
- A new build – the Grant will be paid after foundations have been laid and the first progress payment has been made to the builder.
- A substantial renovation – the Grant will be paid after construction has commenced and evidence is submitted showing payments of at least $150,000 of the contract price have been made to the builder.
- An off-the-plan home/new home contract – the Grant will be paid after evidence is submitted showing that the property has been registered in your name on the certificate of title. You must be registered on the certificate of title as the owner of the property by no later than 31 October 2022.
Homebuilder will be paid into your nominated account when all eligibility criteria have been met and all supporting documentation provided. This account must be an Australian cheque or savings account.
To qualify for HomeBuilder, each applicant must:
- Retain ownership of the property and occupy it as your principal place of residence for a continuous period of at least six (6) months.
- Commence the above period of occupation immediately upon completion of construction, renovation or settlement.
A principal place of residence is considered to be the home you primarily reside in.
Where an applicant was a member of the permanent forces of the Australian Defence Force and the applicant was enrolled on the Victorian electoral roll at the date of the eligible HomeBuilder contract, then the applicant is exempt from the residence requirement.
To receive the exemption, you must provide a document issued by the Australian Defence Force clearly showing your name and that you are a member of the permanent forces at the date of the eligible HomeBuilder contract.
An exemption will not be granted if the document is not provided.
What should I do if I cannot meet the above residency requirements?
You must notify the State Revenue Office Victoria and repay the HomeBuilder Grant within 14 days of the date you become aware you cannot meet the residency requirement.
The State Revenue Office may require that applicants provide information to verify that they have met the residence requirement.
Applicants should keep appropriate records that can demonstrate to us that the grant address was used as the principal place of residence.