Buying a property interstate with Help to Buy Scheme

Hi

I’m a university student that is planning on moving to Melbourne for further studies and is predicted to be in Melbourne for at least 6 years so I’ve been considering to buy a property in Melbourne as you know Melbourne renting crisis is insane.

As I’m a NSW resident I’m wondering how to approach this. I’m hoping to use the Help to Buy Schem to help pay for the property, however it’s very confusing for me to wrap my head around all the criteria’s and such, I’m eligible for the scheme but it doesn’t contain much information regarding where I can buy the property other than an example of “If Eugene is going to buy a property in Sydney”, there’s no way of contacting the NSW government to ask other than a phone call and I have been trying many days staying for over 1hr waiting for them to pick up. Is it only available for NSW properties? The Victorian Government has a similar thing but you’ll have to live there for at least 2 years.
I’m confused to what government first home buys I could use and where I can use it? I’m unsure which government I’m suppose to be applying it through.

if anyone can help me understand this. That would be great

 

You realise its a lease. You own NOTHING until its paid off. If it falls in value you could lose all you paid to rent at a inflated price. The infated price reflects the cost for the option to buy. On top you are renting but may need to maintain the property. AND You can be evicted from what you think is your home. Its not.

You need to consider the VIC scheme for VIC property not the NSW scheme. if you plan to live in VIC.

What You Need To Know About Rent-To-Own Home Schemes

 

Whichever state the property is being purchased, can't use a NSW Gov scheme for a VIC purchase and vice versa.

 

Hi Paul,
I believe that’s like every other home you buy through home loan, you own NOTHING until the loan is paid of, of course I understand that home loan is different to what I’m asking, but pretty much the same principle. My parents own 3 properties themselves and my other family members owns 3-4 properties (already paid off) I understand how it works. I can always rely on my parents and get them to just pay for the property out right but I’m trying to do this myself. The property I’m looking at is pretty low considering apartments/units costs, priced at $380k and is 15minutes from CBD, I have $20k saved up and my healthcare job pays me well enough to be able to pay it off eventually. I don’t really want to rent for 2 years in Melbourne before I’m eligible for their government assistance program, a 2bd & 2baths for a property 30-45mins away from CBD is almost $1000 per week, I preferred to pay a mortgage than $1000 rent. For 2 years at even half of that is more than $50k. My uni course will costs $420k for the 4years that I will be there, HECS unfortunately does not cover this much. I guess my only option is to apply for the FHB grant. Thanks for your input

 

Not your only option, based on what you've noted in this post, there are a few options available to you.
Suggest engaging a decent mortgage broker to show you these options (if you haven't already)

 

Hi Lucy2544, I am not familiar with the schemes available in NSW but I am familiar with the Victorian Homebuyer Scheme in which the government will contribute up to 25% in purchase price in exchange for the same percentage of equity in the property. I have assisted clients to buy apartments in Victoria using the scheme. There shouldn't be any particular concern regarding the arrangement as the value of apartments hardly appreciates. You will need to buy back the equity from the government by the end of your loan term and live in the property as your PPR. You can decide to buy back the equity from the government earlier if you wish. Depending on the value of the property, you may also be entitled to stamp duty concession or exemption on the purchase.

 

I disagree, this should be a concern, in fact if the value declines you're still entitled to repay the original guaranteed amount (it doesn't decrease)
This scheme should be avoided where possible and by the sounds of it @Lucy2544 does not need to use it based on info provided, there are better options.

 

I believe the scheme is useful depending on the circumstances. Of course, you are expected to repay the original 25%, even if the property value decreases; or if the property appreciates, 25% of its value at the time of repayment. Naturally, the government will share any capital gains proportionate to its interest in the property, but the repayment amount will not fall below the initial loan amount.

In any event, I'm not a mortgage broker or financial advisor so one should evaluate the financial benefit/disadvantages before applying for the scheme.

@Lucy2544 In relation to the requirement to live in the property for 2 years, I believe you're referring to the First Homebuyer Concession/Exemption or Principal Place of Residence duty concession?

 

Hi Rachel! Thank you so much for your help. I would prefer to use the scheme so that I have money left over to be able to afford being on my own for a few months before my friend moves in. I contacted the Victorian Government regarding the Buyer Assist scheme and they stated that I would have to be a resident in Melbourne for at least 2 years. Is this different than the Victorian Homebuyer Scheme?

 

Hi @Lucy2544 , I believe that the Buyer Assist scheme you are referring to is the Victorian Homebuyer Scheme. I understand that the Victorian Homebuyer Scheme does not require the applicant to be a resident for the 2 years preceding the time of application. However, there is a requirement for the applicant to stay in the property as their principal place of residence while the scheme applies. You can check your eligibility using this link: Am I eligible for the Homebuyer Fund? | State Revenue Office (sro.vic.gov.au)