Victorian Homebuyer Fund to help residents buy a home with a low deposit
There’s new funding in Victoria that will help around 3,000 aspiring homeowners buy a house that would be part-owned by the government. You just need to have a deposit of between 3.5-5% and meet the eligibility criteria.
What is the Victorian Homebuyer Fund?
The Victorian Homebuyer Fund (VHF) is a $500 million fund that’s open to eligible people in the state to help them buy a house.
It’s a shared equity scheme, meaning the Victorian Government makes a financial contribution to the purchase price of a home, which it then part-owns in the form of a proportional interest, or share, in the property. Homebuyers can buy back the Government’s share in the property over time through refinancing, using their savings or upon sale of the property.
According to the Victorian State Revenue Office, eligible homeowners could start with a 5% deposit and receive a contribution from the government of up to 25% towards the purchase price of the property they buy. Aboriginal and Torres Strait Islander homebuyers who are eligible for the funding could receive support with at least a 3.5% deposit, and the government would then provide a contribution of up to 35%.
The scheme is backed by two participating lenders, Bank Australia and Bendigo Bank, and the Victorian Government indicates the provisional application process for the VHF will be handled through them.
The funding is available in addition to possible land transfer duty (also known as stamp duty) exemptions/concessions and First Home Owner Grants that may be an option depending on eligibility.
Who is eligible for the funding?
To be eligible to participate in the VHF, the Victorian Government says you need to meet all of the following criteria:
Be an Australian citizen or permanent resident, and be at least 18 years of age at settlement
Have saved the required minimum deposit (at least 5% or 3.5% depending on your circumstances) of your chosen property’s purchase price
Earn $125,000 or less per annum for individuals, or $200,000 or less per annum for joint applicants. This refers to your gross annual income
Occupy the purchased property as your principal place of residence
Be a natural person (that is, not an organisation, company, trust or other body or entity)
Not purchase your property from a vendor who is a related person (such as a relative)
Not own an interest in any land at the time of purchase (including as trustee of a trust or beneficiary under a trust)
Not be a shareholder in any corporation (other than a public company) that owns any land.
Based on these criteria, you don’t necessarily have to be a first homebuyer to be eligible, but you can’t currently own a property.
Where can you purchase a property, and what type, with the funding?
Aspiring homebuyers can’t purchase the property just anywhere they like, but need to buy in either Metropolitan Melbourne, Geelong or an eligible regional location such as Ballarat or Bendigo. The full list of eligible locations is on the Victorian Government’s website.
The property needs to be an existing or new house, townhouse, unit or apartment, so vacant land and off-the-plan properties are not eligible for the funding.
The maximum purchase price under the VHF must be $950,000 or less in Metropolitan Melbourne and Geelong, or $600,000 or less in other eligible regional locations.