The Victorian government has launched a $500 million fund to help homebuyers get into the market. The new Victorian Homebuyer Fund is a shared equity scheme where eligible homebuyers will be able to receive a contribution of up to 25% towards the purchase price of their property in exchange for a share in the property. For eligible Aboriginal or Torres Strait Islander homebuyers, this contribution is up to 35% and the minimum required deposit is 3.5%. When the property value changes, so does the value of the State’s share. The share the State holds may be repaid over time from savings, a loan or from proceeds from the sale of the property.

To qualify for the Homebuyer Scheme the applicant and the property that is the be purchased must satisfy a number of requirements.

Are you eligible?

Applicants will be required to satisfy a number of requirements in order to be eligible for the scheme, including: 

1. Be an Australian or New Zealand citizen, or permanent Australian resident.

2. Be at least 18 years of age at the time of settlement

3. Be a natural person and not a company, trust or other entity.

4. The applicant must not be purchasing from a related person.

5. Meet the income requirements: $125,000 or less per annum for single applicants, or $200,000 or less per annum for joint applicants.

6. Have a deposit of 5% of Purchase Price (or 3.5% if Aboriginal or Torres Strait Islander).

7. Following settlement, you must occupy the acquired property as your principal place of residence.  

8. At the time of purchasing the property, you must not own an interest in any land in Australia or overseas (including an interest as a trustee or beneficiary of a trust).

9. Not be a trustee of a trust or shareholder in any corporation (except a public company) that owns any land in Australia or overseas.

10. Have an approved loan from a participating lender in order to qualify for the scheme.

Is your property eligible?

The property being purchased must be an existing residential property or new home. Please note, vacant land or off-the-plan properties are not eligible properties under the Scheme.

The property must also be located in:

1. Metropolitan Melbourne;

2. Geelong; or

3. Eligible regional locations (see full list here: https://www.sro.vic.gov.au/homebuyer-fund-eligible-locations)

Where the property being purchased is located in Metropolitan Melbourne or Geelong the maximum price must be $950,000.

For properties located in Metropolitan Melbourne or Geelong the maximum price must be $950,000 or less. The maximum purchase price for properties in eligible regional locations $600,000 or less.

If the property meets the above requirements then you may be eligible to apply.

Obligations under the fund

In the event you are approved for the fund, then you will be required to fulfil a number of ongoing obligations. These ongoing obligations include:

1. Annual Review for each year you own the property to ensure you remain eligible.

2. Ensure that the property is insured.

3. Maintaining the property in good working order and rectifying defects.

4. Making all repayments on time.

Moving Forward

The Victorian Homebuyer Fund offers a number of opportunities to eligible homebuyers to quickly enter the market. For more information about the Victorian Homebuyer Fund please visit https://www.sro.vic.gov.au/homebuyer. 

Should you wish for some advice on your personal eligibility to apply under the Victorian Homebuyer Fund then Longton Legal is able to assist. 

*Disclaimer: This is intended as general information only and not to be construed as legal advice. The above information is subject to changes over time. You should always seek professional advice before taking any course of action.*