Victorian HomeBuyer Fund

Check out this Victorian HomeBuyer Fund

Victorian Homebuyer Fund

If you have a 5% deposit, the Victorian Government will contribute up to 25% of the purchase price for eligible participants and 35% for Aboriginal and Torres Strait Islanders in exchange for an equivalent share in the property, whilst removing the need for Lenders Mortgage Insurance.

I m wondering if investors can be eligible to buy their PPOP with this fund?

 

This scheme has been out for a little while now.
You don't have to be a first home buyer but you aren't eligible if you currently own property in Australia.

 

Last thing I would do, is get into partnership with Victorian government

 

It has some merits, but it is a shared equity scheme which means the State Govt owns 25% of your property and gets a share of any gains. You can buy them out through refinance however your LVR likely needs to be around 60% or less before this might be possible. One benefit is the state govt portion of 25% doesnt incur loan interest BUT the state govt gets capital growth. And when their portion is paid out I dont beleive any CGT is incurred since its only the state govt portion that is disposed of. Their responsibility for CGT is a matter for them.

I do question what stamp duty may occur at that time when the state is bought out ? Do they exempt this ? ie recognise earlier acquisition as a first home buyer or is it proportionate ?

 

Stamp Duty exemptions/concessions apply for first home buyers
It's an option for those who are struggling to break into the market, of course there's no such thing as a free lunch but it works for some.

 

There is a HUGE catch for peoples whose income rise and make them ineligible to REMAIN in the scheme. There is a annual review that checks these things. You will then have two years to payout the state. A ballooon trap. Imagine having to payout a 25% interest in a property and the property hasnt risen in value. Or refinance using equity elsewhere. But a failure to discharge within two years could enforce a sale. And a loss. I bet the state doesnt share in any loss.

There can be a benefit for renovators. The state proportion can be reduced by the VALUE of renovations. You must seek approval before making any modifications or renovations of more than $10,000; or those that involve structural changes or require authorisation, such as council approval. You also must seek approval to refinance your property, sell your property, or make voluntary payments that result in you exiting the Homebuyer Fund within the first two years.

Homebuyer Fund case studies | State Revenue Office

Homebuyer Fund | State Revenue Office

 

The old saying "beggars can't be choosers" comes to mind.