COVID-19 Series: HomeBuilder Construction Commencement Requirements Extended

We have been closely tracking the evolution of the HomeBuilder Grant (see here and there and here). We are pleased to share that the Federal Government has now announced an extension of 12 months to the deadline for construction to commence, giving applicants 18 months from the date of the contract to commence works.

The Background

The HomeBuilder scheme offered all eligible owner-occupiers and first home buyers the opportunity to apply for a $25,000 grant, and later a $15,000 grant, to build a new home or substantially renovate their existing home. More than 121,000 Australians applied for the grant before the deadline of 14 April 2021.

To access the grant, successful applicants had to ensure construction commenced on or after 4 June 2020 and within 6 months of the contract date.

The popularity of the scheme resulted in many applicants and those working in the residential construction industry question the likelihood that the 6-month construction period was realistic.
In addition to the number of applications, the industry identified shortages in draftspersons, engineers, builders, and materials as further reasons the original deadline would be difficult to achieve.

The Extension
In an announcement dated 17 April 2021, the Federal Government announced that all successful applicants would be given an extra 12 months, on top of the original 6 months, to commence construction.

Applicants now have 18 months from the contract date to commence construction.

Some other things to remember
Applicants have until 30 April 2023 to provide the Revenue Office with all supporting documentation required to access the grant.

The grant will be paid out to the applicant:
👉🏻 For new builds: after foundations have been laid and at least $150,000 worth of progress payments have been made to the builder
👉🏻 For renovations: after construction has commenced and evidence of at least $150,000 of the contract price has been made to the builder
👉🏻 For Off-the-Plans: after evidence showing the property is registered in the applicant’s name on the certificate of title, no later than 23 April 2023

HomeBuilder is broadly governed by “Integrity Measures”.

When providing your supporting documentation, the Revenue Office will consider:
👉🏻 Has this contract been negotiated ‘at arm’s length’? Are the parties freely and independently entering into this agreement, without any special relationship (e.g. relatives), and are the terms of the contract commercially reasonable?
👉🏻 Have the renovations or building work been undertaken by a registered or licenced building services contractor? Your contractor must be named as a builder on the building licence or permit.
👉🏻 Has the renovation improved the accessibility, safety and liveability of the dwelling? The Revenue Office are unlikely to accept additions such as swimming pools, tennis courts, spas, sheds etc.

Applicants must inform the Revenue Office if they no longer use the property as your principal place of residence within 14 days of the change.

If you’re a HomeBuilder applicant or if you have any other questions, please do not hesitate to contact one of our team.