You can find out more information about the Victorian Homebuyer Fund by reading the following frequently asked questions. If you have applied for the Homebuyer Fund and have questions relating to your home loan application, please contact your lender directly.
Before you apply
What is shared equity in the context of the Victorian Homebuyer Fund?
Shared equity is an agreement in which the Victorian Government makes a financial contribution towards the purchase of your property (up to 25%) in exchange for a proportional interest (share) in your property.
As the value of your property changes, so too will the value of the Government’s interest (share) in the property. This means the Government will share in any capital gains proportionate to its interest in the property.
How many places are available?
The $1.6 billion Homebuyer Fund will, over time, help up to 10,000 households own their own homes.
What additional assistance is available to Aboriginal and Torres Strait Islander applicants?
Eligible Aboriginal and Torres Strait Islander applicants can access a contribution of up to 35% of their property price and qualify for a minimum required deposit of 3.5%. To access this level of assistance, Aboriginal and Torres Strait Islander applicants must provide a Confirmation of Aboriginality (COA).
Aboriginal and Torres Strait Islander participants who cannot provide a COA may still be eligible to access the 25% share equity contribution and would require a 5% deposit.
I’m an Aboriginal or a Torres Strait Islander applicant. Do I need to confirm this in my application and if so, how is that done?
If you identify as Aboriginal and/or Torres Strait Islander when expressing interest in the Homebuyer Fund with your participating lender, they will ask for your Confirmation of Aboriginality (COA) to be verified by Aboriginal Housing Victoria (AHV). If you provide a valid COA, AHV will verify it within two business days and then your application will continue to the next stage.
If you cannot provide a valid COA, AHV can provide information to assist you in obtaining a COA.
I'm a New Zealand citizen living in Australia. Am I eligible?
Yes, provided you meet the eligibility criteria.
How do you apply for the Homebuyer Fund?
You should first check if you may be eligible via our online tool. If you meet the eligibility criteria from the tool, you will receive an email explaining the next steps.
Can I enter into a contract of sale before I have been provisionally approved?
If you intend to apply for the Homebuyer Fund, you should seek provisional approval before signing the contract. If you are unsure please call the State Revenue Office on (03) 7020 1549.
How are banks involved?
Bank Australia, Bendigo Bank, Indigenous Business Australia and Commonwealth Bank Australia are the current participating lenders delivering the Homebuyer Fund. Once you have checked your eligibility, which is just a guide, you should get in touch with your chosen participating lender to conduct standard loan assessments and evaluate if you are able to service a mortgage. It is important to understand that while you may be eligible for the Homebuyer Fund, you may not necessarily be eligible for a loan with a lender.
Can I use another bank?
No. Your loan must be provided by a participating lender, either Bank Australia, Bendigo Bank, Indigenous Business Australia or Commonwealth Bank Australia.
I have saved a 5% deposit, are there any other costs involved?
Yes. You are also required to pay all costs associated with purchasing your home (often known as acquisition costs) such as conveyancing, legal costs, building inspections and stamp duty (if applicable). You may be eligible for stamp duty concessions and the First Home Owner Grant (FHOG) to assist with these costs.
Can I use my home loan funds to pay for these costs?
No, you cannot use the financial contribution from the Homebuyer Fund or your bank loan to pay for any of these acquisition costs. You must have money set aside to pay for these costs.
Can my deposit be more than 5%?
Yes. The required minimum deposit for most applicants is 5%; or 3.5% for Aboriginal and Torres Strait Islander applicants. The deposit must be from your genuine savings.
How long do I need to have saved my deposit for?
Demonstrating genuine savings varies between financial institutions. Check with your chosen participating lender for their requirements.
Is interest charged on the Victorian Government’s financial contribution?
No. A contribution from the Homebuyer Fund does not attract interest, however, as the value of your home changes, so too will the value of the Government’s share (or proportional interest). Because you are buying back some or all of the Government’s share in your property, repayments of the Homebuyer Fund contribution will reflect any capital gains of your home.
Can I apply if I am on a probation period with an employer?
All applicants must secure in-principle loan approval from their chosen participating lender. Lenders may have different requirements about employees who are on probation. Check with your lender for their requirements.
Are there restrictions on where I can purchase a property?
No. Participants can purchase an eligible property in any location in Victoria. View the full list of eligible locations.
Can I buy an established home?
Can I buy a new home?
Yes, provided a certificate of occupancy has been issued at the date of signing a contract of sale.
Do I have to live in the property?
Yes. You and all VHF participants attached to the property must live in the home as your principal place of residence.
Can I still receive the First Home Owner Grant (FHOG)?
Yes. The Homebuyer Fund does not impact your eligibility for the First Home Owner Grant (FHOG). If you are eligible for the FHOG, you will be able to apply in the usual way.
Will I need to pay stamp duty?
You will be required to pay the usual amount of stamp duty that applies at the time of settlement for the full cost of your property. Find out more about stamp duty.
Will I need to pay land tax?
No. To be eligible for the Homebuyer Fund, the property you buy must become your principal place of residence. Based on current policy settings, a property that is occupied by its owners as their principal place of residence is exempt from land tax.
What happens if I want to sell my property?
You must notify us and your lender at least 45 days prior to sale. You are required to sell your property via an independent process, such as through a real estate agent. You will be required to meet the full costs of selling your property, including any upfront costs.
Is there a minimum period the property must be held for before it can be sold?
You are not permitted to sell your property within two years of settlement without the prior written consent of the SRO.
Has a program like this been used anywhere else in Australia?
The Homebuyer Fund was preceded by HomesVic, the Victorian Government’s shared equity pilot, which helped several hundred Victorians into their first homes. Shared equity programs have also been operating in several other states, including South Australia (HomeStart), Tasmania (HomeShare) and Western Australia (KeyStart).
I was previously bankrupt. Am I eligible?
You can apply if you are not currently bankrupt (i.e. a discharged bankrupt), there is no impending bankruptcy, and you are not subject to a Deed of Assignment, Deed of Arrangement, Debt Agreement or Personal Insolvency Agreement. You will still be required to meet all other credit checks performed by the participating lenders.
Once you have applied
Can I buy a property above my indicative maximum purchase price?
Possibly. Before making an offer on a property, you should contact your chosen lender to seek an increase of your pre-approved loan. If approved, your lender will submit a new application on your behalf, which may result in a new provisional approval with a different shared equity contribution and indicative maximum purchase price.
Alternatively, if you have already made an offer on a property above your indicative maximum purchase price, you may still be eligible for the Homebuyer Fund, provided you can increase your deposit or loan amount, and the price is below the relevant property purchase price threshold for the Fund.
What type of insurance do I need to take out on the property?
Your property must be insured against damage, destruction (including by fire, storm, and tempest) and any other risk required by your chosen lender to its full replacement value, or on a reinstatement basis. The insurance policy must be taken out with an authorised insurer and must note the interest held by the State (i.e. the State of Victoria.)
However, if your property is on strata title with an Owners Corporation, the policy will be under the Owners Corporation (not your name) and will not need to note the interest held by the State. It is recommended that you check the extent of the coverage offered by the Owners Corporation insurance policy and acquire additional coverage if required.
How long does it take for provisional approval to be granted?
You will be notified of an outcome within approximately five business days once your lender has submitted to us your completed home loan application and your completed Homebuyer Fund application form.
I’ve been granted provisional approval. What happens next?
You will receive a letter detailing your indicative maximum purchase price (based on your deposit and in-principle loan approval amount) and the maximum financial contribution you may be eligible to receive from the Government, pending the satisfaction of certain conditions.
You will have six months to enter into a contract of sale for an eligible property.
Before buying a property, you will need to watch a short video about the Homebuyer Fund (a link will be provided) and you will need to negotiate with the vendor's real estate agent the provision of a 5% deposit on entering into a contract of sale to purchase the property. If the vendor does not accept a 5% deposit, you will need to contact your lender for advice on the next steps.
What happens if the purchase price of my property exceeds the relevant price threshold for that location?
You will lose eligibility to the Homebuyer Fund which means the State will not be able to make a financial contribution to the purchase of your home.
What happens after I sign a contract of sale?
You will need to pay the deposit at the time of entering into the contract of sale. You will also need to let your lender and us know you have made a purchase so preparations for settlement can be made.
Within five business days you will need to provide a copy of the signed contract of sale to your lender, as well as returning the signed Participation Agreement and the Program Mortgage to us.
What is the process once I receive final approval?
You will receive a letter outlining what you need to do before settlement.
Once you have final approval
Are there any restrictions on the sale methods when buying a property?
No. Any standard sales methodology that is accepted within the real estate industry can be used.
What is a related person?
A person or entity who is related to, or associated with you, including:
- Relatives by birth or marriage (including parents, grandparents, siblings, uncles, aunts, nephews, nieces, lineal descendants or adopted children of your or your spouse, and the spouse or civil partner of any of those people).
- Business partners.
- Spouses, civil partners or children of such business partners.
- Any company you (or any person listed above) controls or can influence.
- The trustees of any trust controlled by a you (or any person listed above) or of which you are a beneficiary or member.
To be eligible to participate in the Homebuyer Fund, you must not purchase your property from a vendor who is a related person.
What happens if I am unable to enter into a contract of sale within six months?
If you are unable to enter into a contract of sale by the end of the six-month period, your provisional approval for the Homebuyer Fund may be cancelled. In making this decision, we will consider any exceptional circumstances that may have affected your ability to enter into a contract of sale within the allotted time. If exceptional circumstances exist, an extension may be granted.
If you are having trouble entering into a contract of sale within the allotted time period, you should contact your lender at least a week before the provisional approval expires, requesting an extension of 3 months. If required, an additional 3-month extension may be granted, bringing the total to a 12-month period including the initial 6 months.
What if I change my mind?
Before entering into a contract of sale, you can withdraw your application at any time by notifying us in writing.
Once you have purchased
I would like to repay some of the Government’s financial contribution. How is the value of the financial contribution determined at that time?
We will commission a valuation of the property from the Valuer-General Victoria at the time you would like to repay some or all of the Government’s financial contribution. Generally, this valuation will be used to calculate the value of the Government’s share in the property at or around the time of payment. View our case studies for more information.
When am I required to repay the Government’s financial contribution in full?
You will be required to repay the Government’s financial contribution within the initial duration of the home loan with your lender plus 60 days.
You may be required to pay the financial contribution early if you breach the terms and conditions of the Participation Agreement or Program Mortgage. In these circumstances, you will be issued an early payment notice asking you to repay the full Government contribution.
How do I exit the Victorian Homebuyer Fund?
Once a contract of sale is entered into (and subject to any cooling off period and/or all conditions of the contract of sale, if conditional, being met), you are required to hold the property as your principal place of residence for at least two years, unless exceptional circumstances occur.
After this time, you can exit the program by either selling your property or repaying the Government’s financial contribution. The latter can be done in a range of ways including by refinancing your home loan (pending approval from your lender), or through voluntary payments.
Can I make a voluntary payment and what is the process?
Yes. Your payment must be at least $10,000 and will need to reduce the Government’s interest by at least 5 percentage points i.e. from 25% to 20%. A valuation will be conducted on your property by the Valuer-General Victoria to determine its current market value. Once the valuation is complete, we will advise you of the payment details and once the payment has been made, you will be notified of the resulting change in the shared equity interest in your property. You may not, however, repay the entire Government’s share within two years of your settlement date without prior written consent from the Homebuyer Fund team.
Who decides how much my property is worth?
The Valuer-General Victoria. It is the Victorian Government's authority on statutory valuations. The Valuer-General oversees valuations for Victorian Government property transactions and rating valuations and will be used to determine your property’s value.
How are proceeds from the sale of my property treated?
The Government’s financial contribution in your property is secured through a second-ranking mortgage, second to your lender’s mortgage. If you sell your property, proceeds will be applied in the following order to:
- Your lender to repay your outstanding loan amount and any other outstanding amounts.
- Homebuyer to repay the Government’s financial contribution and any other outstanding amounts.
- Anyone else with a legal or equitable interest in your property.
Can I refinance my loan?
Yes. You can refinance your home loan, subject to the approval of your chosen participating lender. However, you can only increase your borrowings in limited circumstances, such as paying back the Government’s share, or as otherwise permitted by the hardship provisions contained in the Consumer Credit Legislation. This must be approved by the Homebuyer Fund team.
What happens if I lose my job or suffer financial hardship?
You should notify us and your lender immediately to discuss your options, noting that you are afforded certain protections under the National Credit Code.
What happens if a single applicant subsequently marries or enters into a defacto relationship?
Your ongoing eligibility for the Homebuyer Fund will not change. If you want your new partner to also become a registered owner of the property, you will need to apply to the SRO for approval. If granted, your spouse/domestic partner would be added to your Homebuyer Fund contract (changing you from a single participant to joint participants) and could then be added to the property title.
What happens if my income increases over time and exceeds the income threshold?
If your income exceeds the gross annual income threshold for two consecutive years, you will be required to repay the Government’s financial contribution in part or whole as your circumstances permit. You will need to advise us of your increased income levels and work with your lender to determine the extent to which you can refinance to repay the Government’s financial contribution in part or whole.
Can I vacate the property?
The property must be your principal place of residence. Unless we approve, you cannot vacate the property for more than three months. Generally, there must be exceptional and unavoidable circumstances to obtain approval for vacating (e.g. caring responsibilities on medical grounds). If we agree, time limits may be imposed.
Can I lease the property?
You may lease part of your property (e.g. a room) provided the property remains your principal place of residence (you continue to live in it) and you adhere to all reporting and other requirements.
If we determine that your property is no longer your principal place of residence, we may request you pay back the Government’s financial contribution within six months.
Will I need a conveyancer/lawyer?
Yes. You must engage a lawyer or conveyancer for settlement of the property.
Can the property be renovated?
Generally, yes. However, you will need our approval if you are making modifications that:
- Cost $10,000 or more.
- Require a building or planning permit.
- Involve a structural adjustment to the property.
Modifications that reduce the value of the property are not permitted. In addition, your equity share must not fall below that initially held at the time of purchasing the property as a result of the modifications.
The impact of the proposed modifications on the value of the property will be determined by the Office of the Valuer-General Victoria. Participants will not be required to pay back any increase in the property’s value achieved through approved renovations.
What is the difference between maintenance and renovations?
Maintenance is considered functional checks, servicing, repairing, or replacing of necessary infrastructure. This might include:
- Electrical and plumbing
- General upkeep (interior / exterior painting, etc)
Maintaining the property to an acceptable standard is a requirement of participating in the VHF. Prior approval from either the lender or the SRO (State Revenue Office) is not needed for maintenance.
Example: Steve calls a technician to service his gas ducted heating and is advised it is dangerous and needs replacing. Because this is a replacement of necessary infrastructure, Steve does not require prior permission for the work to be done. The cost of the new heater will not be considered when assessing any increase or decrease in the value of his property.
Generally, any renovations under $10,000 would be considered minor and would not require approval from either the lender or the SRO.
Example: Matt and Bill have saved up $8000 and decide they want to refresh their ensuite. Because the value of the renovations is less than $10,000 and they do not require planning permission, they can undertake the renovations without approval from either their lender or the SRO, which they do. As minor renovations are not considered an approved renovation, there is no impact on future Proportional Interest Amount calculations.
Any renovations costing $10,000 or more or those requiring building or council permits must have prior approval by the lender and the SRO.
The value added by a renovation, if any, will be determined by the Valuer-General Victoria around the time a participant makes a payment to the Victorian Homebuyer Fund. It is important to note that the cost of the renovation may be different to the change in value.
Example 1: Sandeep and Susan purchase a property for $600,000 under the Scheme, which is the same as the initial valuation amount. The Government’s share in the property is $150,000 (25%).
After 10 years, Sandeep and Susan decide to exit the scheme. They had not made any earlier repayments.
The Valuer-General Victoria conducts a valuation and values the property at $750,000.
Sandeep and Susan conducted $25,000 of approved renovations. The Valuer-General-Victoria determined this increased the value of the property by an additional $20,000.
The amount Sandeep and Susan must pay the Government back is $182,500, i.e 25% x ($750,000 - $20,000 + 0).
It is important to note, the value the renovation added to the property, was assessed by the Valuer-General-Victoria and subtracted from the valuation to determine the value of the Government’s interest in the property.
Example 2: Brian and Fatimah have saved $10,000 to build a deck off their family room and apply to their lender for permission, which is approved.
A few years later when they decide to make a payment on the property to pay down some of the State’s interest, a valuation is done on the property by the Valuer-General Victoria.
Any value the deck has added to the home will be assessed by the Valuer-General Victoria and subtracted from their valuation to determine the value of the State’s proportional interest in the property.