UDIA National Member Alert 15 July 2020
The Commonwealth Government has released further updated guidance on the “HomeBuilder” scheme – with additional detail to be provided by the states as they commence the application process.
This follows an ongoing dialogue between UDIA National and the Commonwealth Government to provide greater clarity on various elements of the scheme, as well as seeking to optimise its application and benefits.
As flagged in our prior advocacy alert, the new guidance provides a more explicit confirmation that HomeBuilder indeed applies to sales contracts between buyers and developers – as is commonly the case on off-the-plan apartment and townhouse projects.
We are pleased the Government has embraced our advice to recognise these contracts within the scheme and give clear guidance on their eligibility. There is also more guidance relating to:
- the timing of the payment – depending on whether the project is a new build, a renovation, or off-the-plan and new home purchase.
- Confirmation that the states and territories will have strong discretion to extend the three-month window for commencing construction when unforeseen or other delays occur.
Members can view for the updated guidance material from the Commonwealth via https://treasury.gov.au/coronavirus/homebuilder
However, there are two main elements still requiring clarification and these will be done by the states, rather than the Commonwealth, as they commence the state-based application schemes.
These are:
- More precise guidance around how the potential for a three-month extension to the window for commencing construction will work, and
- The definition of commencement of construction – which we believe needs to be as broad as possible.
UDIA will be working with state and territory governments to try to resolve these issues – though it is likely there will be variations in the definition of commencement between jurisdictions. For example:
- Tasmania describes it as the ‘laying of foundation’, with
- The ACT referring to ‘substantial earthworks, excavations, demolition and physical building works’).
- These are the only two states defining commencement on their websites as of today.
In addition to the above, there are also two other technical issues that the Commonwealth has clarified in the updated Frequently Asked Questions (FAQs), including:
- That all applicants under the scheme will need to be Australian citizens, and not merely permanent residents
- There will be limited application to retirement and land lease communities, given they require the applicant to be on the certificate of title and own both land and dwelling.
In the meantime, UDIA is continuing to engage with the Government to ensure the implementation of the scheme is as effective and efficient as possible.
We will also be working to ensure the Government recognises there is likely to be continuing economic effects from COVID-19 well into 2021 and a smooth pipeline of works will be needed to sustain economic recovery.
