The $25,000 HomeBuilder grant continues to drive demand across Queensland.

Master Builders is hearing that many are still struggling with some of the complexities around the HomeBuilder rules. To help we have prepared a list of HomeBuilder key facts to cover the questions we are hearing most.

We've also developed a template letter to help your clients apply for an extension to the 3-month start on site rule.

DOWNLOAD TEMPLATE LETTER

Application timings

The client should apply for the grant as soon as they sign the contract and no later than 31 December 2020.

An application requires a declaration from the client that they meet or intend to meet all the conditions of the Grant. No supporting documentation is required at this stage.

The client will then complete their application after all the supporting documentation is available.

Applicants have until 31 October 2022 to provide the supporting documentation.

This will include evidence of:

  • Work starting on site within three months (or with a good reason, six months);
  • Payment of the first progress payment; and
  • The title of the land has transferred to the client (in the case of an off-the-plan or house-and-land package application).

The money will be paid after the application is complete.

Finance and pre-approval

Owners can seek pre-approval if they need the grant to be considered as a factor in determining loan eligibility and/or used as the deposit.

If the client’s lender requires evidence of pre-approval for their HomeBuilder grant, they need to make an application and include a copy of the contract, income assessment, proof of identity and citizenship.

The remaining supporting documentation will need to be submitted when available and no later than 31 October 2022.

The money is paid directly to individuals and not the lenders (unlike the First Home Owners Grant). This means that there are still some problems with lenders considering the grant as part of the lending criteria.The government and lenders are working towards a resolution.

Construction commencement

Commencement of construction, in relation to:

  • A new home – the commencement of excavation and site preparation works
  • An off-the-plan home – the commencement of excavation and site preparation work
  • A substantial renovation – when building work under the renovation contract starts.

Extension of time to start on site

If commencement of construction is delayed due to factors that are unforeseen and outside of the control of the parties to the contract, the government may grant a three-month extension to the requirement to start on site. This gives a total of six months to start on site.

Examples of reasons that the government will consider include:

  • 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 a person critical to the commencement of the project
  • Prolonged industrial disputes
  • Natural disasters.

Delays to the land being registered can also be grounds for an extension, provided it was unforeseen at the time of contract signing.

The government is unlikely to grant an extension when:

  • An applicant does not undertake appropriate due diligence when entering a contract, or makes deliberate informed choices that make them ineligible
  • Delay results from the builder contracting to undertake more work than they could be reasonably expected to complete in the relevant timeframe
  • Construction is delayed because the land developer has set pre-development sales targets that have not been met.

When applicants request an extension of time for the commencement of construction the evidence required will vary for each situation. At a minimum, the government would expect to see a letter from the builder and applicant explaining the reasons for the delay, and then depending on what additional evidence is available, it will be up to the applicant to provide what they have on hand to satisfy the Commissioner.

As it is a discretionary provision, each request will be considered on a case-by-case basis. In some situations, the assessor may request additional supporting documents if it’s reasonable to assume that those documents exist, however there may be instances where the detailed letter from the builder and applicant will suffice.

How to apply

The owner can apply for an extension of time as soon as they become aware that there could be a delay in commencing construction that is caused by unforeseen factors outside the control of the parties to the contract.

The owner would need to request the extension via email (HomeBuilderGrant@treasury.qld.gov.au) and include their HomeBuilder application code and supporting evidence.

To assist with client’s obtaining an extension to the three-month start on site date, Master Builders has prepared a template letter for builders to provide to their clients.

Things to watch out for

Feedback from members indicates there are some details in the rules to watch out for. These include:

  • The builder must have held their licence before 4 June 2020. (Where a newly registered company receives their building licence after 4 June the government will accept the licence of the nominee builder provided they held their building licence prior to 4 June 2020.)
  • The contract must be at “arms length”. If there is relationship between the builder and the client, it might be necessary to provide evidence that the contract is on commercial terms.
  • You don’t need to be a first home buyer to be eligible for the grant.
  • Everyone named on the title of the property must be an Australian citizen.

This information is not intended as comprehensive advice on all the requirements of the HomeBuilder grant but rather the key issues likely to affect builders.

For further information, visit the HomeBuilder Queensland website.

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