The HomeBuilder Grant Scheme: Timeline, Changes & Implications

The HomeBuilder Grant scheme (the Scheme) was announced on the 4^th of June 2020. This is a National Partnership Agreement that was implemented in South Australia through The First Home and Housing Construction Grants (Miscellaneous) Amendment Act 2020 (SA).

When it was first announced, eligible owner-occupiers, including first home buyers, could obtain a grant of $25,000 to build a new home or substantially renovate an existing home. Building contracts had to be signed between 4 June 2020 and 31 December 2020, with construction having to be commenced within three (3) months of the contract date.

Since its announcement on 4 June 2020, the Scheme has been varied on a number of occasions to reflect the changing landscape in domestic building works, and delays that have been caused as both a result of the popularity of the Scheme and the changing landscape of the building industry because of the COVID-19 pandemic.

Amendments to the Scheme

Since 4 June 2020, the Scheme has been amended as follows:

When does my Construction have to commence?

Currently, the Scheme applicants have eighteen (18) months from the date of the signed contract to start construction. This is calculated as follows:

(Date of building contract) + 18 months = Final date to commence construction

What does “Commencing Construction” require?

Construction is taken to have commenced for:

1. New Builds / Off the Plan Homes - If ‘site works including excavation for the approved building works to the top of the base level is complete’; and
2. Substantial Renovations - If ‘the works under the renovation contract’ have commenced.

When do I have to move in?

For new builds and off the plan homes, the Scheme applicants have twelve (12) months from the date of construction being completed to move in. For substantial renovations, applicants must move in immediately upon completion of the works.

How long do I have to live there?

Once moved in, the Scheme applicants ‘must retain ownership of the property’ and occupy it as there ‘principal place of residence for a continuous period of at least six (6) months’.

Implications of the HomeBuilder changes?

Though the extension to the construction commencement deadline has eased the pressure on home builders, it does not solve the issues which caused that pressure to begin with. COVID-19 has brought significant disruption to supply chains, increasing the costs of materials and time taken to obtain them. The introduction of various state and federal construction stimulus grants, including the Scheme, has exacerbated shortages in both building materials and skilled tradespeople. The extension may help ensure applicants receive the grant, however, it does not ensure that applicants’ homes will be completed on time.

What happens if shortages in the building industry delay construction?

The Scheme does not specify a time limit on when construction must be completed. There are time limits on when construction must commence, and when and how long for an applicant must reside at their property, but not how long a builder can take to complete the construction.

The contract between the builder and the Scheme applicant should specify time frames around the completion of the project. To help prevent delays, it is important that applicants work with their builders to monitor the progress of the build and ascertain whether the timeframes will be met. Any concerns around potential delays should be communicated to the builder and negotiations may need to be had around extensions of time.

It is critical that Scheme applicants carefully consider the relevant terms of the building contract regarding timeframes for completion and delays, and what delays the builder may reasonably claim. Those circumstances may include the unavailability of materials or labour. It is important to note that if the builder cannot obtain an extension of time for completion, and the delays it has experienced are not those for which the contract provides, and the build is not completed on time, then the homeowner may be entitled to liquidated damages as specified within the contract.

For more specific information on any of the material contained in this article please contact Vas Marinos on +61 8 8210 1283 or vmarinos@normans.com.au or Stefanie Magliani on +61 8 8217 1373 or smagliani@normans.com.au.