A total of 502,165 lights adorn the house in Canberra which belongs to David Richards and his wife Janean.
It marks the second time the couple have held the record, after originally taking the title in 2011 when they decorated their home and property with 331,038 lights.
Their record was broken - on November 23, 2012 - by a family in Lagrangeville, New York, who set up 346,283 lights.
Richards, a father-of-three, admitted reclaiming the record was part of his motivation for setting up the lights again this year. He started working on it last month.
A representative from Guinness World Records visited Richards' house and has confirmed the feat.
The dazzling lights include more than 50km of LED string lights, 520 Lightorama channels controlling a 50-metre, walk through, multi-coloured canopy and an 18-metre light-controlled tree (all animated and synchronised to music).
The display has proved so popular, one couple even got married under it.
Janean's cousin Luana Marriott, married Patrick Cormac at the house over the weekend with only the white lights turned on, creating a spectacular effect, the 'Canberra Times' reported.
The display will be open to the public from November 30 to December 26.
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