Everything you need to know about the HomeBuilder Grant (Victoria)

Victorian HomeBuilder applications must have been submitted by midnight 14 April 2021. Supporting documents can be uploaded after this date as needed; however, the main application must be lodged.

Many Victorians have struggled as a result of COVID-19. The government is doing its part to help get things back on track, with a significant initiative being the HomeBuilder Grant.

The HomeBuilder Grant can be used by an Australian citizen to substantially renovate an existing home, build a new home, or buy an off-the-plan home. Originally slated for 1 January 2021 to 31 March 2021, the government extended this date to 14 April 2021. As this date has lapsed, Victorian HomeBuilder applications can no longer be submitted. However, supporting documents can still be uploaded.

As of 12 March 2021, 26,858 HomeBuilder applications have been filed in Victoria (both new build and renovation).

Whether you are building a new home or undergoing extensive renovations, this is your chance to get some well-deserved financial aid and enhance your property. Read on to find out everything you need to know about the HomeBuilder Grant: eligibility criteria, your obligations under your contract, and how you can apply.

Who can apply for a HomeBuilder Grant?

The grant is open to eligible owner-occupiers, including first home buyers, and provides support to Australians looking to build a new home or renovate their existing property. Applicants can be individuals or couples who will be registered as the homeowners on the certificate of title; that is, an applicant must be a person, not a company or trust. Owner-builders are not eligible for the grant.

Only Australian citizens are eligible for the HomeBuilder Grant; residents and those in Australia on a visa do not qualify. Applicants must not exceed the income cap ($125,000 per annum for individuals, $200,000 per annum for couples). This is based on your 2018-2019 or your 2019-2020 taxable income and is demonstrated by the notices of assessment received from the Australian Taxation Office.

Other eligibility criteria are as follows:

  • The property must be in Victoria.
  • Construction must commence within six months of the contract being signed.
  • The property must be the principal place of residence for the applicant upon completion for a continuous six-month period.

Contracts must be signed between 4 June 2020 and 14 April 2021 (inclusive). Contracts signed before this date will not be considered for the grant. Additionally, if construction began before this date, you will not be eligible.

Construction does not have to begin once the contract is signed or the HomeBuilder application has been submitted. However, you must commence construction within six months of the contract being signed; otherwise, you may be in violation of the terms of the grant and will have to repay any money received.

Do I need to be registered as the owner on the certificate of title before applying for a HomeBuilder Grant?

You must be recognised as the owner of the property on the certificate of title, though the deadlines for this differ depending on the type of grant you receive. For new builds, you should be registered by the time foundations have been laid, while the grant for off-the-plan/new homes requires you to be registered on the certificate of title once construction on the building has been completed. In the case of substantial renovations, you must be registered as the owner-occupiers before you enter a contract with the builder.

$25,000 HomeBuilder Grant

If you entered into a contract between 4 June 2020 and 31 December 2020 (inclusive), you may qualify for the $25,000 grant. This includes the following:

  • A new home build where the property value (house and land) must not exceed $750,000.
  • Contracting a licensed builder for substantial renovations to your home. These must total between $150,000 and $750,000 and the existing property value cannot exceed $1.5 million. If you demolish your existing house and plan to completely rebuild, you will be considered in this category if both the demolition and rebuild occur on/after 4 June 2020.
  • The purchase of a new home or off-the-plan home where construction commenced on/after 4 June 2020. The contract price must not exceed $750,000.

*All cost thresholds are inclusive of GST

$15,000 HomeBuilder Grant

If you entered into a contract between 1 January 2021 and 14 April 2021 (inclusive), you are eligible for the $15,000 grant. This includes the following:

  • A new home build where the property value (house and land) cannot exceed $850,000.
  • Contracting a licensed builder to substantially renovate your home. In this case, these must be valued between $150,000 and $750,000 and the property value cannot exceed $1.5 million. This category also encompasses projects where you demolish and rebuild a new house on your existing land, provided that demolition did not occur before 4 June 2020.
  • The purchase of a new home or off-the-plan home where construction commenced on/after 4 June 2020. The contract price cannot exceed $850,000.

*All cost thresholds are inclusive of GST

What counts as a substantial renovation?

According to Section 195-1 of the GST Act, substantial renovations are:

“renovations in which all, or substantially all, of a building is removed or is replaced. However, the renovations need not involve removal or replacement of foundations, external walls, interior supporting walls, floors, roof or staircases”.

Substantial renovations are functional and typically improve the safety or liveability of a home. Aesthetic alterations (flooring, painting, landscaping, etc.) and renovations purely for enjoyment, such as adding a swimming pool, will not be considered.

If you demolish the existing structure on your land and commence construction on a new home, this also is considered a substantial renovation for the HomeBuilder Grant.

Other circumstances

First home buyers

First home buyers may apply for the HomeBuilder Grant in tandem with the First Home Owner Grant, making this a great opportunity for those new to the housing market. If the new home you buy is in regional Victoria, you will receive a greater amount.

Homes destroyed in the 2019-2020 bushfires

For people whose homes were destroyed in the bushfires and wish to rebuild on the same land, you would apply for a substantial renovation rather than a new build.

Regional Victoria

If you live on a farming property that would normally exceed the house and land value limit, there are alternate modes of assessment available. In these cases, the government may only consider the value of your home instead of looking at the land.

You will be required to provide a cover letter that demonstrates your land is used as a genuine farming property. Additionally, you can use the following documents to support your HomeBuilder application:

  • Insurance documents that indicate the replacement value of your home and the rate notice of your land.
  • Independent valuation of your home based on replacement cost and rate notice of your land.

What builders are eligible for HomeBuilder?

There are certain criteria your builder must meet. Builders should have a domestic builder (unlimited) licence from the Victorian Building Authority. For some substantial renovations, a builder may only be required to hold a domestic builder (limited) licence. A copy of this license must be included to support your application.

Your builder also must have held their license for a certain amount of time, depending on the grant.

  • For contracts signed before 29 November 2020, the builder must have been registered before 4 June 2020.
  • For contracts signed after 29 November 2020, the builder must have only been registered before 29 November 2020.

When will I hear back about my grant application?

The government aims to get back to every applicant within 15 business days; however, due to the sheer number of applications, this process will almost certainly take longer. It is important to note that your application must have been lodged before 14 April 2021 — you do not have to have it approved before this date.

Depending on whether you’re building or renovating, you will receive your payments at different phases of the project:

  • New builds must have laid foundations and individuals must have paid the first progress payment to their builder.
  • For substantial renovations, the grant is only given after construction commencement and individuals have submitted proof of payment (at least $150,000).
  • For new home contracts or off-the-plan homes, the property must be registered in your name on the title by 30 April 2023.

If you are unsuccessful in obtaining a HomeBuilder Grant, there are still options available. You may be able to appeal the decision to the relevant dispute resolution body. Our lawyers are always happy to discuss your case if you feel that there are grounds for appeal.

What about other states?

The HomeBuilder Grant is available all across Australia, although there are some differences between states. For example, other states still observe the initial $750,000 price cap on new builds, while this was increased in Victoria to $850,000. In New South Wales, the maximum is $950,000. Thus, you will need to be aware of the conditions of the grant in the state/territory you are purchasing in as you may not qualify.

If you wish to apply for a HomeBuilder Grant in another state or territory, make sure you check the relevant rules and regulations. A more comprehensive list of the different eligibility criteria and government bodies assessing the grant can be found here.

Great! So how do I get started?

To apply for a HomeBuilder Grant, you’ll need to submit the following to the State Revenue Office:

  • Proof of identity
  • A dated copy of the contract that is signed by you and your nominated builder
  • A copy of the builder’s license/registration to prove eligibility
  • A copy of either your 2018-2019 or 2019-2020 tax return
  • Supporting documents (approvals from your council, land value estimations,

For more information about the HomeBuilder Grant, visit the State Revenue Office website or get in touch with one of our property experts.

This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.

 Last updated: 1 January 2021 Article by: Halil Gokler Edited by: Randa Balbissi

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