Detective Sergeant Rob Hanna, of the Dunedin CIB, said the man was known to the family who lived in the three-bedroom house on Lorne St. They were out of town at the time of the fire.
The house was extensively damaged in the blaze, which started about 10pm.
Police charged the man with arson and said they were not looking for anyone else in connection with the blaze. Inquiries were continuing.
''We have finished our scene investigation and we are still conducting interviews with witnesses,'' Det Sgt Hanna said.
''It's a terrible thing to happen on Christmas Day to anyone,'' he said.
Fire Service southern communications shift manager Karl Patterson said firefighters were called to the blaze at 10.15pm.
The house was well alight when they arrived, Mr Patterson said.
Two appliances from Mosgiel and trucks from Lookout Point and Roslyn attended the fire, which was under control by about 1am, Mr Patterson said.
The alleged arsonist was remanded in custody to reappear on January 15 when he appeared in Dunedin District Court yesterday.
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