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What you need to know - NSW HomeBuilder Grant

July 24, 2020

On 25 July 2020 the Department of Treasury and Finance, Revenue NSW released its guidelines on the Federal Homebuilder grant.

Revenue NSW guidance on the HomeBuilder grants are available here.

The HomeBuilder grant provides eligible owner-occupiers $25,000 towards the cost of building or buying a new home or substantially renovating an existing home. If the client/s home was destroyed in the 2019-2020 NSW bushfires, and they are rebuilding on their existing land, the house will be considered as a substantial renovation, allowing the home to be valued up to $750,000 excluding the land.

Information about the Federal Homebuilder grant are detailed below.

WORK TYPES COVERED

  • Contract to build (house and land package).
  • Contract to build on land your client already owns.
  • Contract to purchase a new home (off the plan or speculative home).
  • Substantial renovation work, including ‘knock-down rebuild’.

WORK TYPES NOT COVERED

  • Additions to property such as swimming pools, tennis courts, outdoor spas, saunas, sheds or garages (unconnected to property).
  • Stand-alone granny flats.
  • Work carried out by owner builders and investors.

CONTRACTS MUST BE SIGNED BETWEEN

4 June 2020 and 31 December 2020.

If the client/s have entered into a contract on or after 4 June 2020 that replaces a contract made prior to 4 June 2020 to build the same or substantially similar home, they may not be eligible to receive the HomeBuilder Grant.

CONSTRUCTION TIMEFRAMES

Building work must commence within 3 months of the date of signing the contract.

Applications can be made after signing the contract and the documents supporting evidence of commencement may be lodged when commencement of construction and the payment eligibility requirements milestones have been met.

New Builds/Off the plan purchases: Commencement of construction is when excavation and site preparation works begins.

Substantial renovations: Commencement of construction is when works under the renovation contract starts.

EXTENSION OF TIME

Revenue NSW may allow an extension of time for commencement for up to a further 3 months if delays are unforeseen and outside the control of the parties to the contract.

Examples of the criteria for exercising discretion includes, but is not limited to the following:

  • delays in obtaining council approvals;
  • difficulties in obtaining construction materials and/or sub-contractors;
  • inclement weather, where the disruption is substantial;
  • health problems relating to, or the death of, a person critical to the commencement of the project;
  • prolonged industrial disputes;
  • natural disasters.

EVIDENCE TO SUPPORT COMMENCEMENT

New Builds/Off the plan purchases: Evidence of construction commencement (copy of the notice of commencement as required under the Environmental Planning & Assessment Act 1979).

Substantial Renovations: Evidence of construction commencement, including first invoice issued for work carried out under the renovation contract and receipt/s to show that $150,000 has been paid to the builder.

If applicable, a statement confirming reasons for the delays in construction commencement.

WHEN WILL THE GRANT BE PAID?

New builds: the Grant will be paid after foundations have been laid and the first progress payment has been made to the builder.

Substantial renovations: After construction has commenced and evidence is submitted showing payments of a least $150 000 of the contract price have been made to the builder.

Off the plan purchases: After evidence is submitted showing that the property has been registered in your name on the certificate of title. The applicant must be registered on the certificate of title as the owner of the property by no later than 31 October 2022.

CONSTRUCTION CRITERIA

  • Owner-occupied as principal place of residence for at least 6 months after completion.
  • Property must be in New South Wales.
  • Property must be fixed to the land (no mobile homes).

APPLICANT

Applicant must be:

  • Natural Person (not a company or trust).
  • 18 years or over.
  • An Australian Citizen.

Joint applicants must be married, a couple in a registered relationship or a de facto couple living in a genuine domestic relationship.

INCOME CAPS

For the 2018/2019 or 2019/2020 financial year:

  • $125,000 per annum for an individual applicant.
  • $200,000 per annum for a couple.

IMPLEMENTATION

Department of Treasury and Finance, Revenue NSW.

PROPERTY VALUE CAPS

  • New home $750,000 (including house and land and off the plan).
  • Substantial renovations the existing property not to exceed $1.5 million.

CONTRACT PRICE CAP

  • Contract value for new home not to exceed $750,000 (including house and land and off the plan).
  • Contract value of substantial renovation between $150,000 and $750,000.

BUILDER CRITERIA

All building work must be undertaken by a licenced builder.

TAX

Non-taxable

TIMEFRAMES FOR APPLICATION

Application must be made after the contract is signed and lodged by 31 December 2020.

INTEGRITY MEASURES

  • Building work for a related parties to the building contract is prohibited.
  • Contracts must be made at arm’s length. This means the contract must be made by two parties acting freely and independently of each other, and without offering favour as a result of some special relationship, such as being related to one another.
  • The terms of the contract should be commercially reasonable, and the contract price should not be inflated compared to the fair market price.

Application Form

The application form for the client/s to complete is available here.

Applications can be lodged via an online portal.

The client/s will have to provide information about their income, citizenship, certificate of title and building contract, or a copy of the sales contract for the purchase of an off the plan home/new home.

Contact a HIA Workplace Adviser on 1300 650 620 for further information and advice

Current at: 25 July 2020
HIA ref no: NFSINP1352