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HomeBuilder extension details revealed

by Annie Kane6 minute read
HomeBuilder extension details revealed

The details surrounding the newly announced extension to the HomeBuilder program have been released.

On Sunday (29 November), the Treasurer announced that the HomeBuilder program will be extended to 31 March 2021, albeit in a modified form.

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The original program, which offers grants of $25,000 to owner-occupiers “substantially renovating” or building a new home, is available for contracts signed up to 31 December 2020.

After that day, the extended HomeBuilder program will apply.

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This will provide a $15,000 grant for building contracts (new builds and substantial renovations) signed between 1 January 2021 and 31 March 2021, inclusive.

There has also been an increase to the property price cap for new build contracts in NSW and Victoria. These are rising to $950,000 and $850,000, respectively.

However, this only applies to the second iteration – where the contract is signed between 1 January 2021 and 31 March 2021.

The existing new build property price cap of $750,000 will continue to apply in all other states and territories.

Deadline extensions

The deadline for all applications to be submitted has now been extended for both iterations – with applications now eligible for either of the grants up until 14 April 2021 (inclusive). 

This will apply to all eligible contracts signed on or after 4 June 2020. 

Following calls for an expansion of the time frame to construction commencements (given concerns that the popularity of the scheme has caused builder shortages), the start time frame has been expanded from three months to six months for all HomeBuilder applicants. 

This will also apply on a backdated basis (i.e. available to all eligible contracts entered into on or after 4 June 2020).

The government also noted that there has been a change in licensing requirements and registration for builders and developers.

For example, 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. 

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. 

Prime Minister Scott Morrison said: “HomeBuilder is a key part of my government’s Economic Recovery Plan for Australia. We’re keeping people in jobs and putting Australians’ dream homes within reach.

“It’s critical we keep the momentum up for Australia’s economic recovery.”

“Extending HomeBuilder will mean a steady pipeline of construction activity to keep tradies on the tools.”

Treasurer Josh Frydenberg added: “The Homebuilder program has delivered the stimulus the housing sector needed.

“The sector is worth $100 billion a year to the Australian economy, or around 5 per cent of GDP, and more than a million people are employed in the sector across Australia.

“The success of this program has not only meant an increase in work on the ground to keep the pipeline of construction flowing but it has also protected jobs in the construction sector as well as across the economy,” Mr Frydenberg said.

Minister for Housing and Assistant Treasurer Michael Sukkar also commented, saying that the most recent data showed HomeBuilder had already had around 24,000 applications, on track to exceed expected take-up levels.

“This has been a highly effective program that’s delivering real results for home buyers and has kept tradies in work throughout the COVID pandemic,” Minister Sukkar said.

“There is no better proof of HomeBuilder’s success than the latest Housing Industry Association’s new home sales data, which shows sales are 31.6 per cent higher in the three months to October 2020 when compared with the same time last year.

“This is a temporary and targeted program, and we want to give buyers the confidence and support to enter the market right now at a time when the economy needs it most.”

The announcement also builds upon the extension of the First Home Loan Deposit Scheme announced in the budget, which delivered 10,000 guaranteed loans to allow first home buyers to obtain a loan to build a new home, or purchase a newly built home, with a deposit of as little as 5 per cent.

[Related: Lenders applaud FHLDS expansion]

HomeBuilder extension details revealed
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Annie Kane

Annie Kane

AUTHOR

Annie Kane is the editor of The Adviser and Mortgage Business.

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