Victorian Homebuyers Fund

Eligible homebuyers can now receive a contribution of up to 25 per cent towards the purchase price of their property in Victoria, reducing their minimum required deposit to five per cent and avoiding the need to pay Lenders Mortgage Insurance.

For eligible Aboriginal or Torres Strait Islander homebuyers, this contribution is up to 35 per cent and the minimum required deposit is three and a half per cent.

<h3>What is the fund?</h3>

The Homebuyer Fund is a shared equity scheme, meaning that the financial contribution from the Homebuyer Fund to the purchase price is made in exchange for a proportional interest, or share in the property.

As the value of the property changes, so too will the value of the Homebuyer Fund&rsquo;s interest in the property. This means the Homebuyer Fund will share in any capital gains proportionate to its interest in the property.

Participants can repay the Homebuyer Fund&rsquo;s interest in their property over time, including through refinancing, using savings, and must do so when the property is sold and in other circumstances.

<h3>Who&rsquo;s eligible?</h3>

To be eligible to participate in the Homebuyer Fund, buyers will need to meet a certain criterion, including like having saved the required minimum deposit of your property price, earn $125,000 or less per annum for individuals, or $200,000 or less per annum for joint applicants, and occupying the purchased property as your principal place of residence.

Buyers will need to meet all of the eligibility requirements and have an approved loan from a participating lender to be eligible for the Homebuyer Fund. Eligible participants must become registered owners of the property they buy.

<h3>What property is eligible toward the fund?</h3>

The property purchased must also be in Metropolitan Melbourne, Geelong or another eligible regional location within Victoria.

The property must be a standard residential property such as a house, townhouse, unit or apartment (vacant land is not eligible) and 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, given a certificate of occupancy has been issued prior to the date of the contract of sale.

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 the tenants must vacate the property.

<h3>So what&rsquo;s next?</h3>

Buyers will need to gather the required supporting documentation and approach a participating lender.

Once approval has been received for a compliant home loan from a participating lender, the lender will lodge an application for the Homebuyer Fund with the State Revenue Office.

If the application is successful, the buyer will then be granted provisional approval for the Homebuyer Fund, which means a contract of sale for an eligible home must be completed within six months. &nbsp;&nbsp;

Once the property has reached settlement, and as with most settlement transactions in Victoria, the contribution from the Homebuyer Fund will be provided via the independent Electronic Lodgement Network Operator (ELNO) workspace for the settlement of the property, unless alternative arrangements have been negotiated and agreed upon.

To find out more about the fund, visit the Victorian State Revenue Office online, <a href="https://www.sro.vic.gov.au/homebuyer-fund/applying-homebuyer-fund">here</a>.

The Homebuyer Fund is a shared equity scheme, meaning that the financial contribution from the Homebuyer Fund to the purchase price is made in exchange for a proportional interest, or share in the property.



alisonwarters@gmail.com

What is the Victorian State Homebuyer Fund and how do I apply?

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&rsquo;s Treasurer Tim Pallas says the Victorian Homebuyers Fund (VHF) will help more of the state&rsquo;s residents buy a home.

Most recipients are expected to have a 5% deposit for the house, townhouse or apartment.&nbsp;

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.&nbsp;

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.&nbsp;

&ldquo;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,&rdquo; 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.&nbsp;

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 &quot;a sensible policy that will be particularly helpful to [first-time] entrants in the property market.&quot;&nbsp;

The Victorian Treasurer denied the scheme would further push up house prices.

&ldquo;It&rsquo;s not something that will effectively augment the price,&rdquo; he said.

&ldquo;We&rsquo;re not putting more money into people&rsquo;s pockets &hellip; we&rsquo;re giving them the opportunity to participate in a competitive market.&rdquo;

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.&nbsp;

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

Victorian Homebuyers Fund

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Victorian Homebuyers Fund

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News