The Victorian Government recently introduced a new Homebuyer Fund, being a $500 million shared equity scheme to address the housing affordability issue and assist Victorian’s to buy a home.
Under the scheme, ‘eligible homebuyers’ will receive:
- up to 25% contribution towards the purchase of a property for homebuyers with a minimum 5% deposit; or
- up to 35% contribution towards the purchase of a property for Aboriginal and Torres Strait Islander homebuyers with a minimum 3.5% deposit.
However, like many government incentive schemes the devil is in the detail and homebuyers should be aware that even if the basic eligibility criteria is satisfied (including, being an Australian citizen, aged 18+, income threshold, purchase price cap), there are also various ongoing conditions that must be satisfied in order to participate in the scheme. It’s some of the ongoing conditions that caught us by surprise and must be well understood by those wishing to participate in the scheme, including to:
- obtain State government approval to renovate (if $10,000 or more) or if making structural changes;
- obtain State government approval to repay the fund in full within the first 2 years (that is, the government wants you locked in for at least 2 years) or to reduce the State’s equity stake to below 5%;
- start repaying the Homebuyer Fund if:
– the homebuyer’s income exceeds the income threshold (annual reporting of income is required); or
– if the homebuyer receives a windfall payment of $10,000 or more (eg. an inheritance or lotto win).
Is the great Australian dream of home ownership actually realised if you are then beholden to the government for so long as you are participating in the fund? Imagine not being able to renovate or improve your property without State government consent or not being able to take prize money and spend it as you desire!
If you are considering participating in the scheme, talk to us first.