Homebuilder Grant: A Quick Guide to Building Contracts and frequently asked questions

The Federal Government recently announced the Homebuilder scheme, offering $25k cash grant to all eligible Australians who wish to build new homes. While the chance to design and build your own house is attractive, the thought of building a home from scratch may seem like a daunting task to most people.


There are three main ways homeowners may choose to build their own property:

  1. Purchasing a House and Land Package;
  2. Demolishing an existing house and building a new property; and
  3. Building on vacant land.

A land and build package will allow you to purchase a plot of land from a vendor who will also manage the future construction of your house. This package offers you the peace of mind as the vendor will manage and ensure that your home is built on time, with no additional cost.  Land and build packages have the advantage of additional stamp duty savings, while also allowing you the flexibility to choose your property design.

Alternatively, if you wish to design a house from scratch, you can engage a builder to assist you after you have purchased a plot of land.



We have compiled some Frequently Asked Questions for your consideration.


  1. What happens if the builder fails to complete on the date of completion?

Builders are liable to pay liquidated damages for each day after the intended date of completion. However, Builders usually account for any possible delays in constructions and provide a buffer between their estimated completion date and the date of completion.


  1. Can the builder use different materials without telling me?

No, the builder must give you a written notice asking for a variation of materials, your written and signed consent is needed. You may reject the variation but must not unreasonably withhold consent especially if the variation request is made in accordance with legislative building requirements.


  1. What happens if I find out that the property is inhabitable after moving in?

There are various statutory warranties that are implied into the building contract, warranting that the property is fit for occupation at completion. You may seek an order to rectify any defects in your property for no cost if the defect occurs within the warranty period. For NSW, the warranty period is 6 years after the date of completion.


  1. Do I have to pay the full price of the building contract upfront before construction commences?

No, you are not required to pay the full amount upfront. Builders are only permitted to request for progress payments, which are partial payments made at different stages of the construction process, reflecting the work completed up until the point of invoicing.


  1. What if the building is different from the plans provided?

If the building on completion is different from the plans initially agreed on, you can lodge a complaint with the respective state tribunals. Each complaint will be assessed on its own merit and evidence provided. If successful, the court may order the builder to pay compensation or rectifications at no cost.


If you have any questions regarding a build contract or property, do not hesitate to contact us at any time at 02 9267 4988 or Vincent.hui@sunlaws.com

Posted in Blog.