Is it a Big Smile for Home Builders with $25,000 Grants: Unboxing the Government’s Offering


  • The home building industry of Australia had taken a hit due to the halt in the construction activities resulting from the spread of COVID-19.
  • The Australian Government has introduced a time-limited grant (4 June-31 December 2020), HomeBuilder package that shall assist the residential construction market to bounce back from COVID-19 disaster.
  • A grant of $25,000 shall be granted under the program to the eligible owner-occupiers for substantially renovating an existing home and building a new home.
  • The program complements the schemes of the Commonwealth, as well as the State and Territory Governments.

Recently, the Federal Government introduced new HomeBuilder program for encouraging commencement of new home builds and renovations during the current year and home builders are all smiles.

A vacuum was growing in recent past regarding the burden of New home building activity on Australia’s GDP growth in the second half of 2020. Negative GDP result for the March quarter and the expected negative result for the June quarter had alarmed over the need for measures to kick-start the nation’s post-COVID-19 recovery.

In order to support the jobs in the residential construction sector, the Government announced new HomeBuilder program that shall offer a grant of $25,000 to all eligible owner-occupiers (not only first home buyers) to build a new home or significantly renovate a current home.

HIA Welcomes HomeBuilder Program

The Housing Industry Association (HIA), the official body of Australia's home building industry, appreciated the ‘HomeBuilder’ package and believes that it indicates significance of the home building industry in generating jobs and economic activities of the country.

Managing Director of HIA, Graham Wolfe said:

“The HomeBuilder package will support the delivery of tens of thousands of new home and renovation projects, and most importantly this incentive will support hundreds of thousands of jobs across Australia”

According to HIA, the package is projected to generate more than $15 billion in national economic activity and address the projected decline in housing activity over the next 12 months.

Related: Revival of Housing Market: HIA Suggests New Home Buyer Incentive

In February 2020, the HIA had forecasted a fall in the supply of new houses to be at 171,000; however, the same is now expected to stand as low as 111,000 in 2020/21. HIA is optimistic that the program shall help to curb the significant contraction in new home building activity in 2020/21 by keeping the people in jobs and enabling them to build houses.

Also, we have seen the effectiveness of stimulating home building activities as an effective catalyst for recovery during the past economic shocks; the current package shall also help the Australian economy through this difficult time.

Eligibility Criteria

The eligibility criteria for HomeBuilder program includes income caps of $125,000 (per year) for singles and $200,000 (per year) for couples based on their latest assessable income, and the program is expected to offer around 27,000 grants at a total cost of around $680 million.

Along with income caps, the owner-occupiers are required to be a natural person (not a company or trust), aged 18 years or older, an Australian citizen and must enter into a building contract between 4 June 2020 and 31 December 2020 to either:

  • build a new home as a principal place of residence, where the property value does not exceed $750,000; or
  • substantially renovate one’s existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of one’s existing property does not exceed $1.5 million

However, the commencement of the construction must be contracted to begin within three months of the contract date.

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How to Apply for HomeBuilder

The HomeBuilder program shall be executed through a National Partnership Agreement, signed by the State and Territory governments as well as the Commonwealth government, and shall make use of present mechanisms of the State and Territory to dispense payments under the HomeBuilder program.

The ability of the people to apply for HomeBuilder depends on signing of the National Partnership Agreement between the State or Territory Government of the place where they currently live or plan to live in, with the Commonwealth Government.

Moreover, applications shall be backdated to 04 June 2020 as and when the States and Territories start receiving the applications for HomeBuilder.

Further information regarding the availability of the application for the Homebuilder program shall also be made public via the relevant State or Territory revenue office in coming times.

Benefits of HomeBuilder

The program is anticipated to fill the gap in construction activity by increasing residential construction activity in the second half of 2020.

140,000 direct jobs and another 1,000,000 related jobs in the residential construction sector including businesses and sole-trader builders, property developers, construction materials manufacturers, engineers, designers, architects, and contractors, shall be benefitted through the amplified activities under the HomeBuilder program.

Along with the First Home Super Saver Scheme and First Home Loan Deposit Scheme of the Commonwealth, the program further complements the existing schemes of the state and territory, like stamp duty concessions, First Home Owner Grant programs, and other grant schemes.

The HomeBuilder program is expected to create much better prospects for first home buyers to enter the property market while offering support to other eligible Australians to build a new home or renovating the current home.

The program is expected to have a cost of $680 million on the Budget.

Assistance to Western Australia

Huge damage has been caused to Australia’s residential building sector, especially in Western Australia, which has the shortest project (home building) pipeline of all states. However, critical support to jobs and businesses in WA’s residential building sector shall be provided through the HomeBuilder package.

Western Australia has just undergone the toughest five years on record, and home building pipeline of Western Australia contracted by about 50 per cent as sales fell and existing jobs were put on hold after the initial shock of the COVID-19 pandemic.

HIA had downgraded its forecast for Western Australia housing starts in 2020-21 to less than 10,000 dwelling starts, indicating a decline of over 40% from one to the next.


With all the optimism surrounding the Australian home builder market due to the HomeBuilder package, experts are hoping for a recovery in the Australian housing market that is believed to be severely impacted by COVID-19. A support package for stimulating job growth and activities in the industry was much needed as the industry was nearing a significant contraction in new home building activity in 2020/21.





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