$25,000 Home Builder Grant Scheme Announced

The Federal Government has announced a new Home Builder grant scheme, providing eligible owner-occupiers (including first home buyers) with a tax-free grant of $25,000 to encourage people to build a new home or substantially renovate their existing home.

The Home Builder grant is only available on building contracts signed between 4 June 2020 and 31 December 2020, and construction must begin within 3 months of the contract date.

The Home Builder grants will be distributed by the revenue office of the State or Territory where you live, or plan to live, on behalf of the Australian Government, which will be the State Revenue Office ( SRO ) in Victoria.

There are a few complexities to consider for the Home Builder grants, for both home builders/renovators and the building industry in general, and we recommend that all of these issues are considered in detail before signing a new contract on the expectation that the Home Builder grant will apply.

Eligibility criteria

Various eligibility criteria apply to those individuals applying for the Home Builder grant and the builders engaged to complete the building project.

Individual applicant eligibility

The Home Builder scheme is available to owner occupiers, including first home buyers, but it is not accessible to owner builders, developers or investors.

To be eligible you need to be:

An individual (not a company or trust); and
18 years of age or older; and
An Australian citizen (not for non-residents, permanent residents or New Zealand citizens).

The individual applicant will also need to meet the income test, which states you cannot earn more than:

Individuals - $125,000 based on your 2018-19 or later tax return; or
Couples - $200,000 based on both of your 2018-19 or later tax returns.

The income limit is based on your gross income, before tax and excluding superannuation. The easiest way to confirm your income with your 2019 Notice of Assessment, which shows your taxable income for the 2018-2019 financial year.

The Government has noted that the gross income threshold will be tested against your most recent lodged tax return. We note that the Home Builder grant will likely be a self-assessment application process, so if the SRO later identifies that your income exceeds the thresholds above (even as a result of a subsequent amended 2019 tax assessment), you may be required to repay the $25,000 grant payment.

The building project eligibility

The building contract must be signed between 4 June 2020 and 31 December 2020, and the construction or renovation must commence within three months of the contract date.

The grants are available if you build a new home or renovate a home to live in (your principal place of residence) where:

For " new home " (incl. house, apartment, house and land package, off-the-plan, etc) construction - the property value (house and land) does not exceed $750,000; or

For " renovation works " (incl. renovation works must be to "improve the accessibility, liveability and safety" of the dwelling) completed to substantially renovate your existing home - where:

The renovation contract is between $150,000 and $750,000, and

The value of your existing property (house and land) does not exceed $1.5 million

We note that "renovation works" must be made to "improve the accessibility, liveability and safety" of the dwelling, and cannot be for additions to the property (such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages (unconnected to the property)).

If you own or have purchased land but have not signed a contract to build your home, you may meet the eligibility criteria if you:

Own a property (house and land), and demolish the house to rebuild a new dwelling – this will be counted as a substantial renovation, and therefore subject to the "renovation works" price range of $150,000 to $750,000 provided the total value (house and land) of the property does not exceed $1.5 million pre-renovation;

Own vacant land before 4 June 2020, and then build – the total value of the land and new build cannot exceed $750,000; or

Buy the land after 4 June 2020, and then build – the total value of the land and build cannot exceed $750,000.

Building contract integrity measures

Building contracts must be agreed at arms-length rates , that is, the parties cannot be related, connected or between two parties not freely independent of each other. Renovations or building work must be undertaken by a registered or licenced builder and have a currently valid building licence or permit.

We note that you cannot be an owner builder, individually employ tradespeople to complete the renovations, or use a contract from earlier than 4 June 2020 even if construction has not started yet.

In relation to the pricing requirements, the terms of the building contract should be commercially reasonable, and the contract price should not be inflated compared to the fair market price. The rules enable the purchaser to request that the builder demonstrate that the contract price for the new build or substantial renovation is no more than a comparable product (measured by quality, location and size) as at 1 July 2019.

Interaction with first home owner grant scheme

The Home Builder grant does not exclude first home buyers from accessing other grants and concessions such as the First Home Owner Grant, stamp duty concessions, the First Home Loan Deposit Scheme, and First Home Super Saver Scheme.

Timing issues to consider

We note that payment timing of the $25,000 Home Builder grant has not been confirmed by the Government at this time. If you are entering into your building contract before the Home Builder grant is paid out, we recommend you consider whether the access to the $25,000 grant payment is not essential for you to be able to complete and finance the building project.

We also note that the $25,000 Home Builder grant should not be relied upon to fund the deposit for the building project, for the same timing reason explained above.

Finally, as the builder/contractor needs to commence building works within three months of the contract date, so it will be important to make certain that the contract clearly recognises the commencement dates.

What is the application process & what documentation should be provided?

You will be able to apply for Home Builder grant through your relevant State or Territory revenue office or equivalent authority, once the State or Territory Government that you live in (or plan to live in) signs the National Partnership Agreement.

The State or Territory revenue office (ie. the SRO in Victoria) will require certain documents to process an application, and it is currently understood (at a minimum) that you will need to provide the following information/documentation:

Proof of identity;
A copy of the building contract, dated and signed by you and the registered or licenced builder;
A copy of the builder's registration or licence (depending on the state you live in);
A copy of your 2018-19 tax return (or later) to demonstrate your eligibility against the income cap; and
Documents such as council approvals, building contracts or occupation certificates and evidence of land value.

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Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further

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Tax Alert - Planning for Superannuation Contributions before 30 June 2026

May 18, 2026

Planning for Superannuation Contributions before 30 June 2026 As the end of the financial year is approaching, we take this opportunity to remind you of the various superannuation thresholds, opportunities, obligations and changes, including topics such as: Concessional contributions Non-concessional contributions Superannuation guarantee Impending changes to superannuation from 1 July 2026

FEDERAL BUDGET 2026-27

May 12, 2026

SUMMARY AND FULL COMMENTARY UPDATES

Practice Update – May 2026

May 4, 2026

Special Topic: Payday Super changes apply from 1 July 2026, act now to be prepared! The ATO has issued further guidance on Payday Super changes that apply from 1 July 2026. In particular, the ATO released a ‘Payday Super checklist for Employers’ ( click here ), which is a good summary of the tasks that should be completed before 1 July 2026, and now is the time to act. Understanding ‘qualifying earnings’ From 1 July 2026, employers will calculate super using ‘qualifying earnings’ ( QE ) instead of the current ‘ordinary time earnings’ ( OTE ). For many employers, the new concept of QE is broader than OTE, but it should not change the amount they need to pay for their employees. However, it may require updates to payroll software configuration and reporting. Employers should review and prepare to correctly map pay codes now to meet reporting obligations and ensure readiness when their updated payroll software is available. QE include the following payments: OTE (ie. payments for ordinary hours of work), including certain types of paid leave, allowances, bonuses and lump sum payments. There are no changes to what payments are considered OTE under Payday Super. For a full list of payments which are included within OTE – click here . All commissions paid to an employee. Salary sacrifice amounts that would qualify as QE had they not been sacrificed to superannuation. Earnings paid to workers who fall under the expanded definition of employee, including payments to independent contractors paid mainly for their labour. Some payments may fall into more than one category of QE, such as commissions, and those payments are covered only once to the extent of the overlap in categories. The total QE for a pay period is determined by aggregating all qualifying payments made to or for an employee on the relevant day, forming the basis for calculating superannuation guarantee ( SG ) contributions. Each payday, employers will need to report both year-to-date QE and superannuation liability for each employee through Single Touch Payroll ( STP ). Employers should confirm their updated payroll software has this reporting functionality built in. Understanding new timing requirements for super contributions From 1 July, employers are responsible for ensuring that super contributions reach super funds within 7 business days of the relevant payday , calculated on the QE amount. Super funds will have 3 business days (down from 20 days) to allocate or return contributions that cannot be allocated. There is currently no obligation for the Super fund to confirm that an employee contribution has been allocated successfully, however if 3 days have elapsed we can accept that the employee contribution has been processed correctly. A super payment only counts once it is received by the employee’s superannuation fund, not when it is submitted. Submitting on day seven may not allow enough time, and we note there is no extension for rejected payments - so employers must ensure there is enough time to correct any errors and for SG contributions to reach funds within the 7 business days. Understanding importance of testing payroll software before 1 July 2026 Prepare now, review your payroll system readiness, engage with payroll software providers and ensure the functionality for these new changes will be supported. It has been widely suggested that new payroll software functionality is tested and everything is running smoothly before 1 July. Note that super payments for pay cycles in July 2026 may be due before your final quarterly super payment is due on 28 July 2026 (ie. for the June 2026 quarter, being April to June). Contributions received on or before 28 July 2026 will reduce any super owing for the June 2026 quarter first . If there is any remainder, contributions will then be used under Payday Super. If you pay on time for the June 2026 quarter and Payday Super you do not risk incurring penalties. The ATO has provided an example of this issue ( click here ), and explains that if the employer pays the correct amount for the June 2026 quarterly payments and the first Payday Super payment (ie. for the first pay cycle in July, which could be weekly or fortnightly) is paid in full both contributions will be made on time. Understanding cash flow pressure Employers may have multiple super payments due during July 2026, including: super payments for each Payday (after 1 July 2026); plus the final quarterly super payment due 28 July, for June 2026 quarter (ie. April to June). Employers should review their expected pay cycles for July 2026 to understand the impacts of paying super each payday after 1 July 2026. Employers may consider setting aside additional funds to make sure they can meet their obligations. If cashflow permits, employers can pay the June 2026 quarter super on or before the first payday in July (ie. the first pay cycle in July, which could be weekly or fortnightly). If an employer can do this, your business will have: a more seamless changeover to the Payday Super system; and time to correct any rejected payments before the 28 July deadline. We recommend that all employers take actions as soon as possible to be best prepared for the Payday Super changes coming in from 1 July 2026. If you require assistance, please contact your Lowe Lippmann representative.