Australian Government announces Homebuilder stimulus program
Program targeted at new home builds and renovations
10 June 2020
The Australian Government has announced the HomeBuilder program as a way to increase residential housing supply and lift the construction market by encouraging the commencement of new home builds and renovations in 2020.
Eligible owner-occupiers (including both current home owners and first home buyers) may apply for a grant of $25,000 to help build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020 and construction commences within three months of the contract date.
As part of the scheme, home owners will also be able to access existing State and Territory First Home Owner Grant programs, stamp duty concessions and other grant schemes, as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme. The grant will not be taxed as income.
Owner-occupiers must meet the following eligibility criteria:
- be an Australian citizen aged 18 years or older (and not a company or trust)
- meet one of the following two income caps: $125,000 per annum for an individual applicant based on 2018-19 tax return or later; or $200,000 per annum for a couple based on both 2018-19 tax returns or later
- either build a new home as a principal place of residence where the property value (including land) does not exceed $750,000; or substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property (including land) does not exceed $1.5 million
- construction must commence within three months of the contract date
- renovation works must be to improve the accessibility, safety and liveability of the dwelling, and cannot be for additions such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages (unconnected to the property)
Owner-builders and those seeking to build a new home or renovate an existing home as an investment property are ineligible for HomeBuilder.
The Australian Government expects HomeBuilder to provide around 27,000 grants at a total cost of around $680 million.
The announcement has drawn a range of responses from the development and construction industries, economists and academics. Social and affordable housing advocates have expressed disappointment in the scheme, in the context of widespread call for a national social housing construction program. As outlined in our recent AHURI Brief, there are wide ranging benefits of a social housing construction approach and our research from 2019 has proposed a number of investment pathways for large scale investment from government to deliver new social housing.