What Does The HomeBuilder Grant Mean For Property Investors?

​The Federal and State Governments have recently announced the HomeBuilder grant, which offers eligible owner-occupiers (including first home buyers) a grant of $25,000 to build a new home or substantially renovate an existing home. The objective of HomeBuilder is to assist the residential construction industry to bounce back following the Coronavirus crisis. 

While the grant is not available for use for renovation of an investment property, there are potential future benefits for investors who may choose to renovate their principal place of residence now. 

Please note: this information is intended as a guide and not financial advice. Please discuss your individual investment goals and circumstances with your accountant and/or financial advisor before taking any action. ​​

​Who is Eligible for the HomeBuilder Grant?

​To access HomeBuilder, owner-occupiers must meet the following eligibility criteria:

• you are a natural person (not a company or trust);
• you are aged 18 years or older;
• you are an Australian citizen;
• you meet one of the following two income caps:
  • $125,000 per annum for an individual applicant based on your 2018-19 tax return or later; or
  • $200,000 per annum for a couple based on both 2018-19 tax returns or later;
• you 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 your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property does not exceed $1.5 million;
• construction must commence within three months of the contract date

Owner-builders and those seeking to build a new home or renovate an existing home as an investment
property are ineligible for HomeBuilder.

​So How Could HomeBuilder Benefit Property Investors?

​Clearly, HomeBuilder is not applicable for the renovation or acquisition of investment property. So as an investor, how could HomeBuilder be of benefit to you?

There are two primary ways HomeBuilder can be helpful for property investors.

1. Increasing Equity In Your Own Home

If you are eligible for HomeBuilder, and have the ability to renovate your primary place of residence within the timeframe HomeBuilder is available, a renovation of the magnitude of $150,000+ would add significantly to the current value of your home. This increase in equity could be utilised to go towards the purchase of an additional investment property, or upgrading properties within your existing portfolio. 

This will of course come down to your individual circumstances and this should be discussed in detail with your accountant and/or financial advisor.

2. Planning For Future Usage Of Your Property

Taking advantage of the HomeBuilder program now, if possible, to improve your own home may be of benefit in future. You may know that your current primary place of residence won't remain so in years to come e.g. you may have long-term plans to downsize, upsize or otherwise relocate - and at that time you may consider converting your home to an investment property rather than selling. If so, making renovations now to your primary place of residence may be beneficial in the long term.

​Special Consideration To Water Efficiency When Renovating

Regardless of the timing and funding of your renovation, an essential consideration if renovating your home with a view to it "one day" becoming an investment property, is that any renovation to bathroom space should consider water efficiency standards.

As well as ensuring current water efficiency standards are met, note that from 23 March 2025 all toilets on a property must be dual flush and have a minimum 3-star WELS rating if water usage is to be charged to the tenant. Further information is available on the NSW Fair Trading website. 

For further information about the HomeBuilder program, view the NSW Government website.