HomeBuyer Fund VIC

Hi Guys,

Thoughts on the HomeBuyer fund co-ownership initiative from the VIC government released yesterday? Allowing buyers to buy property up to $950k

The government will chip in up to 25% of the property (no interest charged on this portion), LMI exemption and the buyer can buy the government out in full after 2 years but needs to pay the proportion of the growth correspondent to the government % contribution.

Sounds like a good initiative to me, but would like to read your thoughts!!

In my specific case I am looking to buy @ 800k with a $100k saved up and I was going to take a personal loan for $40k in order to pay 10% deposit and avoid crazy LMI and go in the more affordable range of it, and pay Stamp Duty.

If I opt in to this program I could buy up to 950k, the government would only contribute with 15% of that ($140k). The benefits I see are I could buy a existing detached house on 600m2 in the 900k vicinity.

Do you think it would be better to stick with the 800k purchase price or get into the government program and buy something better @900k and let the government opt 15% of my property for the first 4 years whilst I pay them out?

There are quite a few restrictions with it, like you need to ask for permit to renovate, can not refinance and can not rent the property whilst you have the debt with the government. However, in my case I am not planning to renovate short term, not planing to move short term, and planning to buy the government out maximum over the course of the first 5 years.

Thanks!!

Applying for the Homebuyer Fund | State Revenue Office
Applying for the Homebuyer Fund | State Revenue Office

Frequently asked questions about Homebuyer Fund | State Revenue Office
Frequently asked questions about Homebuyer Fund | State Revenue Office

 

Hi, just a question. Does it mean that as long as government has share in our property, we cannot change it to IP? and Do we have to have full 25% from government contribution or are we allowed to take only 10-15% contribution from government?
Thanks

 

That's correct. If the government owns any equity in the property, you cannot convert it into an investment property. You must either pay the government back or refinance if equity is available.