HomeBuilder Scheme
The Australian Government has extended the Federal HomeBuilder Grant for contracts signed up to March 31, 2021.

Tasmania has also extended the Tasmanian HomeBuilder Grant for contracts signed up to March 31, 2021.

Combined the extended grant is now worth $35,000 to new-home buyers, $20,000 from Tasmania and $15,000 from Canberra.

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The Australian Government has:

  • Reduced the grant amount to $15,000 for contracts entered from January 1 to March 31, 2021;
  • Replaced the builder registration eligibility date to November 29, 2020, for contracts entered on or after that date; and
  • Extended the end date for lodgement of applications under the scheme for all applicants to April 14, 2021.

The Tasmanian Government has:

  • Extended its existing $20,000 HomeBuilder Grant by three months to 31 March 2021 for owner- occupiers of eligible new home builds.
  • The grant amount for the extension is unchanged at $20 000 and applies to eligible contracts signed between 4 June 2020 and 31 March 2021 inclusive.
  • Here’s the existing HomeBuilder Grants Guideline for 4 June 2020 to 31 December 2020.
Significant Commencement Extended

The Tasmanian Government will adapt criteria in line with amendments proposed to the National Partnership Agreement so that all new-home builds will have a period of six months to commence construction, and builders registered up to November 29 will be eligible under both schemes.

Background

On June 4, 2020, the Federal Government announced a stimulus package for the residential building sector that Master Builders Australia spent two months advocating for.

It was a major win for Master Builders Associations around the country.

MORE: BIG Advocacy Win !!! Tasmania Extends Its End Of HomeBuilder Stumping Up $20k

MORE: BIG ADVOCACY WIN !!! Here’s What You Need To Know On The HomeBuilder Extension

 

HomeBuilder FAQs

Master Builders is hearing that many are still struggling with some of the complexities around the HomeBuilder rules. To help we have prepared a list of HomeBuilder key facts to cover the questions we are hearing most.

Comprehensive home building contract
When building a new home, the grant only applies to a ‘comprehensive home building contract’ i.e. a contract between a builder and an owner where the builder undertakes to build a home from the start of building work to the point where the home is ready for occupation.

The grant requires the builder to be engaged from site preparation right through to occupation by the homeowner with everything included in that contract.

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

It’s important therefore that builders do not encourage or recommend to their clients to separate out contracts for whatever reason if they intend to apply for the HomeBuilder grant.

Contract pitfalls

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.

What is the contract price cap (for new builds and renovations)?
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.

What type of contracts are eligible under HomeBuilder?
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.

What is meant by “commencement of construction”?
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.

Who needs to undertake the construction?
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.

Application timings
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.

No supporting documentation is required at this stage.

The client will then complete their application after all the supporting documentation is available.

Applicants have until 30 April 2023 to provide the supporting documentation.

If assessed as being eligible, the money will be paid after the application is complete.

Finance and Pre-approval
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.

Extension of time to reach commencement
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.

Other things to watch out for

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.

This information is not intended as comprehensive advice on all the requirements of the HomeBuilder grant but rather the key issues likely to affect builders.

For further information, visit the HomeBuilder website.