Background
A three-month extension of the HomeBuilder Scheme has just been announced. Whilst the scheme was due to expire on 31 December 2020, it is now extended to 31 March 2021.
Under the current scheme, eligible individuals who are either building a new home or renovating an existing one are eligible for a $25,000 grant. The scheme was introduced earlier this year as part of the $688 million program to stimulate the building and construction industry.
The announcement of the extension follows extensive advocacy from various industry groups pleading to extend the scheme. The introduction of the scheme earlier in June this year has seen many positive effects on the building industry including an increase in jobs and wages. In addition, the scheme has enabled thousands of Australians to access the dream of owning a home.
Summary of the Changes to the HomeBuilder Scheme
There have been several changes to the Scheme, which include the following:
1. Grant Decrease
There has been a decrease in the amount of the grant from $25,000 to $15,000 for all building Contracts signed between 1 January 2021 and 31 March 2021.
2. Application Extension
There has been an extended deadline for all applications to be submitted, including those applying for the $25,000 grant and the new $15,000 grant. Applications can now be submitted up until 14 April 2021, which will apply to all eligible Contracts signed on or after 4 June 2020.
3. Construction Commencement Extension
There has been an extension to the construction commencement timeframe from three (3) months to six (6) months for all applicants. This will apply to all eligible Contracts signed on or after 1 January 2021 and all Contracts entered into or after 4 June 2020. Therefore, once a Contract is entered into, construction must commence within six (6) months.
4. Property Price Cap Increase (NSW & VIC)
There has been an increase to the Property price cap for new building Contracts in New South Wales to $950,000 and Victoria to $850,000 for Contracts signed between 1 January 2021 and 31 March 2021.
5. Licensing Requirements
There have been changes to licensing and registration requirements for builders and developers as follows:
(a) where an eligible Contract is signed on or after the 29 November 2020, the builder or developer must have a valid licence or registration before 29 November 2020; and
(b) where an eligible Contract is signed before 29 November 2020, the builder or developer must have a valid licence or registration before 4 June 2020.
How to Establish Eligibility
To establish eligibility under the Scheme, you must:
- be an individual (not a company or trust);
- be aged 18 years or older;
- be an Australian citizen; and
- have an income of less than $125,000 per annum for an individual applicant, or $200,000 combined income for a couple;
- enter into a building Contract between 4 June 2020 and 31 December 2020 or 1 January 2021 and 31 March 2021 to either:
- build a new home as a principal place of residence valued up to $750,000 (for Contracts entered into between 4 June 2020 and 31 December 2020) or $950,000 (for Contracts entered into between 1 January 2021 and 31 March 2021);
- substantially renovate your existing home as a principal place of residence with the total value of the Property not exceeding $1.5 million and the renovations must cost at least $150,000 and must not exceed $750,000.
If you require more information on the above please contact Ben Wong on bwong@marsdens.net.au or by phoning 02 4626 5077.
The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.
