Who is eligible of the Victorian Homebuyers Fund (VHF)?

The Victorian Government has launched a $500 million homebuyer fund that will see the government own a share of 3,000 homes.

Eligible homebuyers can now receive a contribution of up to 25% towards the purchase price of their property, reducing their deposit while avoiding the need to pay Lenders Mortgage Insurance.

The state’s Treasurer Tim Pallas says the Victorian Homebuyers Fund (VHF) will help more of the state’s residents buy a home.

Most recipients are expected to have a 5% deposit for the house, townhouse or apartment. 

The maximum purchase price must be $950,000 or less in Metropolitan Melbourne and Geelong, or $600,000 or less in other eligible regional locations.

The purchase can be for an existing or new property provided that a certificate of occupancy has been issued prior to the date of the contract of sale. 

Off-the-plan property purchases are not eligible.

The property must also be vacant when purchased or, if under a lease, the lease must expire within 12 months of the acquisition date and any tenants must vacate the property.

The government will keep a stake in the home until the property is sold or the owner buys out its share. 

“We will put that money back into the fund, so this will become self-sustaining in all likelihood, given the continuing and historical appreciation and value of assets over time,” Pallas said.

To be eligible to participate in the Homebuyer Fund, you need to be an Australian citizen or permanent resident, and earn $125,000 or less per annum for individuals, or $200,000 or less per annum for joint applicants. 

Participants must occupy the purchased property as their principal place of residence.

They can not purchase the property from a vendor who is a related person.

The Real Estate Institute of Victoria (REIV) welcomed the Victorian Homebuyer Fund saying it seemed to be "a sensible policy that will be particularly helpful to [first-time] entrants in the property market." 

The Victorian Treasurer denied the scheme would further push up house prices.

“It’s not something that will effectively augment the price,” he said.

“We’re not putting more money into people’s pockets … we’re giving them the opportunity to participate in a competitive market.”

Recipients do not need to be first home buyers, but cannot currently own a property.

The Victorian fund is an expansion of the $50 million HomesVic Shared Equity Initiative, which helped more than 330 households into the market.