Business guide to Coronavirus

The HomeBuilder initiative: What it means for the construction industry

A $688 million HomeBuilder initiative could boost the construction industry during the coronavirus (COVID-19) pandemic. 

Learn how it works, how it could benefit your business and what you should look out for before signing a contract.

What is the federal government’s HomeBuilder grant scheme?

HomeBuilder is a time-limited, tax-free grant program which aims to bolster the residential construction market through the coronavirus pandemic and keep builders employed. The scheme aims to give eligible owner-occupiers, including first home buyers, a grant of $25,000 to either build a new home or significantly renovate an existing home.

How does the HomeBuilder grant scheme work?

Unlike the First Home Owner Grant, the HomeBuilder scheme will be available to everyone who meets the eligibility criteria, including:

  • being an Australian citizen aged 18 years or older and an individual, not a company or trust
  • on an income of less than $200,000 for couples or $125,000 for individuals
  • spending between $150,000 and $750,000 on:
    • the renovation of a home that has been previously valued at less than $1.5 million
    • building a new home worth less than $750,000.

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HomeBuilder can also be supplemented alongside the First Home Owner Grant, stamp duty concessions and other grant schemes, which may make taking on a new construction project even more appealing.

If you’re a construction business, this could mean a number of lucrative contracts may be about to come your way as the scheme is only valid for construction contracts entered into between 4 June and 31 December 2020. It also means your business needs to be in a position to start work right away, as construction must start within three months of signing the contract.

What is the potential impact for the construction industry?

In addition to creating an estimated 140,000 residential jobs, HomeBuilder is also predicted to create over a million secondary jobs resulting from the scheme, for trades such as carpenters, electricians and plumbers. Workers who specialise in timber-milling, and glass, brick and tile making, are also expected to see an increase in work.

The federal government aims to fund an estimated 27,520 projects (at $25,000 each).

What do business owners and tradies need to know about the eligibility criteria?

For successful cooperation during the limited time HomeBuilder is available, businesses are encouraged to ensure that each contract is commercially sound to maintain pricing and reasonable market levels.

Furthermore, the government discourages contracts between any parties with special relationships (e.g. relatives).

HomeBuilder may not be a failsafe plan for wider issues impacting the nation following the coronavirus crisis, however, it could be a lifeline for many construction workers during the recession.

Business owners should take due diligence to protect their reputation in a difficult time, as applicants may take more care researching credentials. Setting up clear expectations when negotiating HomeBuilder project contracts will make sure workers stay safely within the eligibility criteria, so that the project can go ahead.

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