The program, which offers $25,000 grants for people looking to build or renovate their house, was announced on Thursday in the hopes of providing a boost to the building sector which is crumbling in the wake of the pandemic.

Tamworth builder Steve Norvill said while the funding was "something", it had missed the mark for regional areas.

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"The thing is, it's $150,000 up, so people in say Sydney who are on bigger money and whose houses are worth millions, are more likely to spend that sort of money than people in the country," Mr Norvill said.

"To me, that's because if you're doing $150,000 worth of renovations on a house and not changing the size of it, I don't think you'd get your money back.

"You'd be struggling to do that, you would have to have the best of bathrooms, kitchens, laundry everything to even get the cost up to $150,000."

The program only allows for renovations costing between $150,000 and $750,000, which would result in the property being priced at $1.5 million or less, or the construction of new homes valued up to $750,000 including land.

It does not include projects outside the house such as pools or sheds and cannot be used on investment properties.

"The only thing that would come into play in Tamworth is if it was an extension, which would be allowed as part of the renovation," Mr Norvill said.

"Not many people would spend that kind of money on their house to renovate it, but I think they would spend it to do an addition.

"I think the government has gone too high with the amount of money, if they dropped the $150,000 down to say $40,000, then I think it would work better for regional areas.

"It would probably be helpful to those who might use it to help build their house, but they would have the funds in place to do that already."

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Tamworth plasterer Brent Dietrich echoed Mr Norvill's sentiments, and said the government had "missed the big picture".

"It's pretty much a white elephant really and I think they've put it out there to look like their doing something, but really it's not going to pick anything up really," Mr Dietrich said.

"It's good they are doing something, because they needed to.

"We had the quietest lead up to Christmas in my 12 years of business and it has just got quieter and quieter.

"Luckily, we have been able to keep going, but from August-September, I can't see too much coming in unless the government does something now."

The grants are eligible for singles earning less than $125,000 a year and couples with a combined income of less than $200,000.

* Cash grants of $25,000 will be available for new home builds and major renovations

* Renovations worth between $150,000 and $750,000 are eligible

* Existing properties cannot be worth more than $1.5 million

* New homes can be worth $750,000 including land

* Renovations cannot be for outside additions, ruling out swimming pools, tennis courts, outdoor spas and saunas, sheds or garages

* Singles earing up to $125,000 a year will be eligible while couples must have a combined income of less than $200,000

* Owner-builders and investment properties are ineligible

* Contracts must be signed by December 31

* Construction must start within three months of signing a deal

* Contracts should not be inflated compared to the fair market price

* The measure is predicted to cost $688 million, provided 27,500 people take up the offer

* The program is designed to work alongside existing state and territory first home owner grants and stamp duty concessions.

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