In early 2020 it was estimated that in the second half of the year, the number of new homes being built would halve due to COVID-19.
Naturally, it was thought that this would have a considerable effect on the approximately 140,000 people employed by the nation’s construction industry. This prompted the introduction of the HomeBuilder Scheme, which was designed to mitigate the projected losses and counteract the stagnant and possibly declining conditions of the construction industry due to lockdowns and economic downturn, by incentivising individuals and couples to purchase off-the-plan and new homes, or for those with existing properties, to renovate them.
The HomeBuilder Scheme was introduced in June 2020 and by November 2020 the HomeBuilder Scheme Extension had been announced.
While the initial offering expired at the end of 2020, the HomeBuilder Scheme Extension is due to wind up on 31 March 2021.
Why was the Homebuilder Scheme extended?
It was not anticipated just how successful the original HomeBuilder Scheme would be and within a matter of months, an estimated 27,000 new homes were contracted to be built as a result of the offering.
At its announcement, it was estimated that the HomeBuilder Scheme Extension would contribute to a further 18,000 new home builds, which would mean approximately 42,000 new homes were built off the back of the Scheme and the Extension combined.
How does the HomeBuilder Extension Scheme compare to the initial Scheme?
It is important to remember that the HomeBuilder Scheme Extension differs from the original HomeBuilder Scheme. Major differences include the original HomeBuilder Scheme offering a grant of $25,000 compared to the Extension, which allows a grant at a reduced amount of $15,000. This $15,000 is payable on the same types of arrangements for new home builds or renovations, subject to the applicant meeting the other criteria.
The Extension also offers a more lenient deadline, and works are able to be commenced within a six month period from the date of signing the builder’s contract, compared to the three-month timeline of the initial Scheme. This means that under the terms of the HomeBuilder Extension Scheme, homeowners who sign a builder’s contract by 31 March 2021 will have up to 30 September 2021 for the works to commence.
Am I eligible for the HomeBuilder Extension Scheme grant?
You may be eligible for the grant if you are:
- renovating your existing home; or
- purchasing a yet-to-be-built home, including off-the-plan properties.
To receive the grant, the property’s value must not exceed the caps allocated. For new home builds, the sale price must not exceed:
- $950,000 in NSW;
- $850,000 in Victoria; or
- $750,000 in all other States and Territories
and in all states, the value of an existing property cannot exceed $1.5 million prior to the renovation.
You must also meet the income test, meaning that individuals wanting to access the grant must earn under $125,000 and couples who share a household must earn less than $200,000 combined.
Additionally, to apply for the Extension you must not have received the first HomeBuilder Scheme grant in any state or territory of Australia.
If you are considering applying for the HomeBuilder Extension Scheme, you must sign a builder’s contract, or purchase an off-the-plan property that meets the Scheme’s requirements by 31 March 2021 to be eligible. Works do not have to commence immediately, but a builder must be engaged, and a contract entered into by the deadline for your application to be considered.
Your application must then be completed and lodged with your local State Revenue Office by 14 April 2021.