From Thursday, June 4, people wanting to buy a new home or substantially renovate their existing home will be able to access a $25,000 government grant after Prime Minister Scott Morrison announced details of his new "HomeBuilder" scheme.
The scheme will be run by the states and territories and while Mr Morrison's spokesman said there had been discussions with the states and a number were supportive, it appears they are yet to finally agree. The grants would become available when each jurisdiction signs the national agreement and be backdated to June 4.
The grants are for individuals earning less than $125,000 or couples less than $200,000, and cannot be used to buy an existing house.
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The value of new builds is capped at $750,000. For renovations, the home must be worth less than $1.5 million before the renovation, and projects must cost between $150,000 and $750,000.
The contract must be signed before end of the year, and work must be contracted to start within three months of signing.
Only Australian citizens aged 18 or over are eligible.
Mr Morrison said the $670 million scheme was expected to help 27,000 households to buy or renovate, but numbers were not limited and the budget was not capped.
The industry expected a 30,000 shortfall in new homes in the second half of the year. Already, the cancellation rate was over 30 per cent, compared to 17 per cent in the global financial crisis.
Alert to the potential for fraud and inflated prices, the government said the money would go to individuals, not the builders, and states and territories would run the scheme and mitigate the chances of fraud.
Competition would keep prices down and the work must be done by builders who already held their licensed before today. Contracts must not be signed between relatives, nor people with other "special relationships" and builders must be able to demonstrate that the price was comparable with July 2018 prices.
Investment properties are ineligible. Swimming pools, outdoor spas, tennis courts, detached sheds and garages are also ruled out.
The government explanation said the money would be released into an owner's bank account once they had made the first progress payment to a builder.
The government has been highly critical of Labor's home insulation and school hall stimulus during the global financial crisis, and in announcing the home builder scheme was careful to explain how it differed from the pink batts installation.
It would be delivered by the states, eligibility was tighter, the timing was strictly limited, and work must be done by a registered building contractor, the government said.
Mr Morrison said the "tradie-led recovery" would "help spark the economy".
"This investment isn't just about helping Australians bring their dream home to life, it's about creating jobs and helping support the more than one million workers in the sector including builders, painters, plumbers and electricians," he said.
"Our JobKeeper support has helped the construction sector weather the crisis, now we're helping fire it up again."
Treasurer Josh Frydenberg said the housing and construction industry was vitally important, worth more than $100 billion to the economy.
"With dwelling investment expected to decline by around 20 per cent through the June quarter, the HomeBuilder program will support residential construction activity and jobs across the industry at a time when the economy and the sector needs it most," he said.
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