On 4 June 2020, Prime Minister Scott Morrison announced the immediate commencement of the HomeBuilder program.

HomeBuilder is one of the federal government’s economic responses to the effects of the coronavirus pandemic. Its aim is to stimulate demand for new homes and substantial renovations across the residential construction market which is forecast to drop during the second half of this year due to the impacts of COVID-19.

By providing grants of $25,000 to eligible owner-occupiers and first home buyers for the construction of a new home or substantial renovation of an existing home, HomeBuilder is expected to support direct and related jobs within the domestic building industry. It is anticipated that 27,000 grants will be made to the value of approximately $680 million, helping industry participants such as building businesses, sole traders and contractors, property developers, material manufacturers, engineers, designers and architects.

How does the HomeBuilder program work?

The HomeBuilder program is available now until 31 December 2020 and will be implemented through a National Partnership Agreement with each state and territory.

In New South Wales the program will be administered by Revenue NSW.

Eligible owner-occupiers (including first home buyers) may be able to receive a tax-free grant of $25,000 to build a new home or substantially renovate an existing home. The contract for the work must provide for construction to commence within three months of the contract date.


Proposed applicants are encouraged to contact their relevant state or territory department for full details on how to apply for the grant, the eligibility requirements, and their obligations if accessing the grant.

Applicants for the HomeBuilder grant and the proposed construction work must meet strict criteria. Information can be found on the HomeBuilder Fact Sheet and HomeBuilder – Frequently Asked Questions.

Below is a summary:

  • Applicants must be natural persons (i.e. not a company or trust), Australian citizens and at least 18 years.
  • An income cap applies of $125,000 per annum for individual applicants (based on 2018-19 or later tax returns) or $200,000 per annum for a couple (based on 2018-19 or later tax returns).
  • A building contract must be signed between 4 June 2020 and 31 December 2020 providing for construction to commence within three months of the contract date.
  • The contract must be for:
    • the construction of a new home (house, apartment, house and land package, off-the-plan purchase) as a principal place of residence where the property value (house and land) does not exceed $750,000; or
    • the substantial renovation of an existing home as a principal place of residence where the renovation contract price is between $150,000 and $750,000 and where the value of the existing property (house and land – before renovation) does not exceed $1.5 million.
  • The principal place of residence requirement precludes new homes to be used as investment properties or renovations to investment properties. Owner-builders are also ineligible for the grant.
  • Renovations must ‘improve the accessibility, safety and liveability’ of the home – consequently, additions such as swimming pools, tennis courts, spas and sheds are ineligible renovations.
  • The builder must be registered / licenced (as relevant for each state and territory) and the relationship between homeowner and builder must be at arms-length.
  • The contract terms and price for the work must be commercially reasonable and at market value.

If you already owned vacant land prior to 4 June 2020, you may be eligible for the grant, subject to meeting all other criteria, if you propose to build and the total value of the land and new build will not exceed $750,000.

You may also be eligible under the ‘substantial renovation’ provision if you own property and propose knocking down an existing house to rebuild. In this case you will be subject to the renovation price range of $150,000 to $750,000, and the value of the property pre-renovation must not exceed $1.5 million.

HomeBuilder to complement existing grants

HomeBuilder is expected to further assist first home buyers by supplementing existing state and territory first home-owner grants, schemes and stamp duty concessions, the Commonwealth First Home Super Saver Scheme, as well as the First Home Loan Deposit Scheme which was introduced earlier this year.

Reviewing your building contract

Whether you are renovating or building a new home under the HomeBuilder program, it is important that the proposed work is documented in a complying agreement and all builders’ licence, registration checks and company searches, where relevant, are conducted.

Contracts must contain adequate protection for the homeowner with the legal rights and responsibilities of the parties clearly stipulated and provisions included to deal with unexpected events with processes to resolve disputes.

Building contracts can be complex and usually contain various technical and legal terms and we recommend having your building contract reviewed by a lawyer before signing.

This article is intended to provide general information only. You should obtain professional advice before you undertake any course of action.

If you or someone you know wants more information or needs help or advice, please contact us on 02 9790 7000 or email [email protected].