As your registered tax agents, we know just how important your money is to you. That’s why we like to keep you informed about any news that might affect your hip pocket – especially when it relates to big, meaningful life goals like buying your first home.
So I’m pretty excited to share the news of the recently announced Victorian Homebuyer Fund (or VHF) with you. It’s an absolutely fantastic opportunity for those trying to break into the market.
Participants in the VHF will only require a minimum deposit of 5%, while the government will provide up to 25% of the purchase price in exchange for an equivalent share in the property.
Wow, okay. That’s a lot of money saved. So who’s eligible?
This $500 million dollar fund is expected to support more than 3,000 home buyers across Victoria.
There are a number of broad eligibility requirements, including an income cap. You must:
- Be an Australian citizen or permanent resident over the age of 18
- Have a gross annual income of $125,000 or less for individuals, or $200,000 or less for joint applicants
- Be a natural person (that is, not an organisation, company, trust or other body or entity)
- Occupy the purchased property as your principal place of residence
- Not purchase the property from a family member
- Not own any interest in any land at the time of purchase (including as trustee of a trust or beneficiary under the trust)
- Not be acting as a trustee of a trust
- Not be a shareholder in any corporation (other than a public company) that owns any land
- If you identify as Aboriginal or a Torres Strait Islander, you can buy with a deposit as low as 3.5% and receive a government contribution of up to 35%
If you’re unsure about whether any of these requirements apply to you or not – particularly around income and interest – it may be a good idea to talk with your accountant or tax agent first to make sure.
Does this sound like you? Here are some of the finer points.
Besides eligibility, there are a number of other things you need to know about the fund.
For starters, eligible participants can purchase in any location in metropolitan Melbourne, with some regional options. Property price caps are $950,000 in metro Melbourne and Geelong, and $600,000 in regional Victoria. Participating lenders currently include Bank Australia and Bendigo Bank.
The property must be vacant when purchased. If already leased, the lease must expire within 12 months of the acquisition date and any tenants must vacate the property. New properties are fine if there’s an occupancy certificate before the sale, but off-the-plan property purchases aren’t eligible.
Homebuyers can choose to buy out the government’s share at market value over time, and the VHF will reinvest these funds to help other prospective home buyers enter the market. As the value of the property changes, the value of the government’s share or interest in the property will change too. This ensures the VHF shares in any gains made.
Finally, participants are still eligible for other Victorian Government housing schemes, including the First Home Owner Grant and First Home Buyer stamp duty concessions or exemptions. Not sure if these apply to you? Have a chat with your tax agent first to find out.
Looking to apply? Find out more here.
As your registered tax agents, Ezytaxback are committed to helping you get the most out of your money. We hope this information about the Victorian Homebuyers Fund has been useful to you in some way.
Still haven’t done your taxes? With less than a month to go, the window is closing fast. Get in touch with the experts at Ezytaxback for an affordable, hassle-free process. Maximum refund guaranteed.
Disclaimer: The information in this article is of a general nature. It does not take your specific needs or circumstances into consideration. You should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.
