COVID-19 Series: An Update to the HomeBuilder Grant

The HomeBuilder scheme has been updated with additional information published on 13 August 2020. This article provides a summary of the updated information and a complete overview of the scheme as it now stands.

What are the HomeBuilder updates?

As promised, the HomeBuilder scheme is now available for off-the-plan purchases. The ACT Revenue Office is issuing “letters of comfort” to some developers, which confirms that particular projects are acknowledged as being eligible for HomeBuilder. If you are thinking of buying off-the-plan, ask your agent or developer to provide a letter from the ACT Revenue Office confirming the eligibility for HomeBuilder!

The eligibility criteria have changed to include new requirements relating to the type of construction contract and when you must be registered on the certificate of title for the property.

πŸ‘‰πŸ» Contracts to build: registered no later than the laying of foundations and first progress payment;
πŸ‘‰πŸ» Substantial renovations: at the time the contract is entered into; and
πŸ‘‰πŸ» Off-the-plan: when the building is complete and you are entitled to take possession, or by 31 October 2022.

The definition of β€˜couple’ for the purposes of applying for the HomeBuilder scheme is now defined as two people that are:

πŸ‘‰πŸ» legally married;
πŸ‘‰πŸ» in a registered domestic relationship; or
πŸ‘‰πŸ» living as a couple on a genuine domestic basis, excluding people related to each other (β€˜defacto’ relationships)

The update also adds to the eligibility criteria:

πŸ‘‰πŸ» Each applicant must not have received the HomeBuilder grant before, either individually or jointly with another person in any State or Territory in Australia.
πŸ‘‰πŸ» Applicants must live in the home as their principal place of residence for a continuous period of 6 months immediately on completion.
πŸ‘‰πŸ» Your home must be owned by you and located in the ACT
πŸ‘‰πŸ» It must also be a suitable place of residence; and
πŸ‘‰πŸ» it must be fixed to your land which excludes access to the grant to those with mobile or caravan homes.

If you are a member of the permanent forces of the Australian Defence Force and enrolled on the ACT electoral roll at the date of the contract, you will be exempt from the residency requirements, subject to providing supporting documentation.

HomeBuilder in a Nutshell
The HomeBuilder Grant of $25,000 assists owner-occupiers in building a new home, substantially renovating or buying an off the plan home. The home must not have been previously sold or occupied as a place of residence before.

HomeBuilder is available:
πŸ‘‰πŸ» for Contracts signed between 4 June 2020 and 31 December 2020
πŸ‘‰πŸ» where construction commences within 3 months of the date of the Contract
Note: if you have entered into a new contract on or after 4 June 2020 that replaces a prior contract to build the same home/renovation, you may not be eligible. If you are unsure, feel free to contact us for clarification relating to your specific contract.

You are eligible if:
πŸ‘‰πŸ» you are a natural person (ie, companies and trusts are not eligible)
πŸ‘‰πŸ» you are 18 years old or over
πŸ‘‰πŸ» you are an Australian citizen
πŸ‘‰πŸ» you earn less than $125,000 per annum (if you are an individual) or $200,000 per annum (if you are a couple)

The HomeBuilder scheme cannot be claimed for small scale works and repairs. It is designed to assist in the build of a new home and in substantial renovations in certain situations.

If you’re building:
πŸ‘‰πŸ» the property must be your principal place of residence; and
πŸ‘‰πŸ» the property value must not exceed $750,000 (including land) on works completion; and
πŸ‘‰πŸ» you must be registered on the certificate of title no later than the laying of foundations and first progress payment.

If you’re renovating:
πŸ‘‰πŸ» the property must be your existing principal place of residence; and
πŸ‘‰πŸ» the works contract must be between $150,000 and $750,000; and
πŸ‘‰πŸ» the value of your existing property cannot exceed $1.5 million; and
πŸ‘‰πŸ» you must be registered on the certificate of title at the time the contract is entered into.

If you demolish your house on the land that you own and decide to rebuild, this will be treated as a substantial renovation. Renovations need to improve the accessibility, safety or liveability of the property but need not include the removal of foundations, external walls, interior supporting walls or floors.
Building a new granny-flat, swimming pool, tennis court or any structure that is not connected to the primary house, such as a shed or garage will not be considered a β€˜substantial renovation’.

If you’re buying off the plan:
πŸ‘‰πŸ» the contract to purchase must not exceed $750,000; and
πŸ‘‰πŸ» construction may have already commenced before the date of the sales contract and after 4 June 2020; and
πŸ‘‰πŸ» you must be registered on the certificate of title when the building is complete and you are entitled to take possession, or by 31 October 2022.

Construction Requirements and Managing Delays:
The building service completing the construction must be licenced in the ACT. Owner-builders are not eligible for the grant.
The maximum extension permitted for any delays to commence construction that fall within three months of the contract date is 3 months. These delays must be due to factors outside the control of both parties.
Requests for extension are to be lodged with the Commissioner of ACT Revenue with supporting evidence for the delay. Construction is considered to have commenced if substantial earthworks, excavations, demolition and physical building work has occurred. Site clearing, fencing, markings and product delivery will not be sufficient as commencement of construction.

Application Process:
Register with the ACT Revenue Office before the 31 December 2020. Note registration does not necessarily mean you will be eligible for the grant.
Click here for Part A of the online process

Once you have registered you will need to complete Part B, a comprehensive form which requires detailed information about you, your builder the construction and supporting documentation. This must be submitted by 31 October 2022.
Click here for Part B of the online process

We’re seeing a lot of activity in the property market as the result of this and other stimulus measures. If you’re thinking about buying property , click here to start your property journey!