Be sure to take extra care when entering into contracts with owners who want to apply for the HomeBuilder grant to build a new home.

In trying to help their clients meet the HomeBuilder deadlines, builders must ensure that they are not entering into domestic building contracts that do not comply with the law (Residential Work Contracts and Dispute Resolutions Act 2016).

The contract must meet the eligibility criteria for the HomeBuilder grants, found HERE.

For more information visit Contract info.

For eligible contracts signed between 4 June 2020 and 31 March 2021 (inclusive), dwelling price cap of $750,000 applies to all new home builds in Tasmania. This means that the value of new builds (house and land), house and land packages, and off-the-plan / new home purchases must not exceed $750,000.

For substantial renovations, a building contract price range of between $150,000 and $750,000 will apply and the total value of your property before renovation must not exceed $1.5 million. This applies to all eligible contracts signed between 4 June 2020 and 31 March 2021 (inclusive). Contract values listed are GST inclusive.

HomeBuilder is available for contracts signed between 4 June 2020 and 31 March 2021 (inclusive). For new builds and substantial renovations, the relevant contract is the building contract.

For developer projects, including off-the-plan builds, the contract is the sales contract, where construction commences on or after 4 June 2020.

Under the definitions of the Tasmania HomeBuilder Act (2020) commencement occurs at the date of completion of the laying of the foundations (or slab) of the building. If not foundations are to be laid, a date determined by the Commissioner in respect of the building.

For an off-the-plan build, commencement of construction may be site preparation stage (including excavation of the site) or the laying of the foundations or laying of a slab for a carpark (whichever is earlier). It is important to check this with the Commissioner of you are building and off-the-plan build.

Construction must commence within 6 months of the contract being made.

Construction must be undertaken by a registered or licenced building service ‘contractor’ who is named as a builder on the building licence or permit. For contracts entered into from 4 June 2020 to 28 November 2020 (inclusive), the licenced or registered builder must have held their licence or registration prior to 4 June 2020.

For contracts entered into from 29 November 2020 to 31 March 2021 (inclusive), the licenced or registered builder must have held their licence or registration prior to 29 November 2020.

The client should apply for the grant as soon as they sign the contract and no later than 14 April 2021.

An application requires a declaration from the client that they meet or intend to meet all the conditions of the Grant.

The application guidelines provide information as to what is required from the State Revenue Office to be eligible for the Grant.

Owners can seek pre-approval if they need the grant to be considered as a factor in determining loan eligibility and/or used as the deposit.

If the client’s lender requires evidence of pre-approval for their HomeBuilder grant, they need to make an application and include a copy of the contract, income assessment, proof of identity and citizenship.

The remaining supporting documentation will need to be submitted when available and no later than 30 April 2023.

The grant money can be paid directly to lenders in the cases where the build is financed.

An automatic extension to the construction commencement timeframe from 3 months to 6 months has been applied to all eligible contracts signed on or after 4 June 2020.

There is currently no option for a further extension beyond the 6 months.

Feedback from members indicates there are some details in the rules to watch out for. These include:

• The builder must have held their licence before 4 June 2020 for contracts signed before 29 November. For contracts signed after 29 November the builder must have held their licence before 29 November.
• Where a newly registered company receives their building licence after these dates the government will accept the licence of the nominee builder provided they held their building licence prior to the cut-off date.)
• The contract must be at “arm’s length”. If there is relationship between the builder and the client, it might be necessary to provide evidence that the contract is on commercial terms.
• The client must be the registered owner on title. The requirement that this must have happened before the foundations are laid has been removed.
• Builders must not take on more work than can foreseeably be delivered under the commencement and completion timeframes for HomeBuilder funded construction projects. Doing so may be considered in any determinations handed down by the Commission in the event that HomeBuilder grants are withheld due to a project not meeting the commencement or completion timeframe under the Act.