Buying a home in Victoria has become seemingly more out of reach than ever for first home buyers. The average house price in Melbourne has risen at the rate of 8% annually in the last 25 years. However, the Victorian and Federal Government Grant schemes have been implemented to make it easier to buy your first home in Victoria.
First Home Owners Grant
The First Home Owners Grant is a Victorian government payment to help you buy a first home of your own.
This is a one-off payment of $10,000 for those who are eligible in Victoria. You also don’t need to pay stamp duty for homes less than $600,000, saving you a substantial $31,000.
Am I eligible for the Grant?
To be eligible for the First Home Owners Grant you must:
- Be an Australian citizen/permanent resident
- Be 18 years or older
- Occupy the home as your principal place of residence within 12 months settlement or completion of construction
- Purchase a new home in Victoria
- Lodge an application with the approved agent after settlement and within 12 months of completing the transaction
- Not have received the grant previously
- Not have owned or owned and occupied a residential property, either jointly, separately previously (before 1 July 2000)
If I am eligible for the grant, the home must be less than five years old, unless located in regional Victoria. However, the home can be:
- A house, townhouse, apartment, unit or similar that is:
- substantially renovated; or
- built to replace demolished premises
- A house and land package
- Land with a contract to build
- An off-the-plan apartment or townhouse
This sounds great, however the Victorian Government Grant does have its limits. For example, the Grant cannot be for an investment property or a holiday house. It cannot have been previously used or sold as a place of residence or accommodation. It also cannot be worth more than $750,000 in value or contract price.
As of March 2021, 45,858 Victorians who bought their first home, benefited from Victorian Grant schemes. The Victorian First Home Owner Grant program’s assistance to Victorian first home buyers has totalled over $592,810,000. Approximately 30% of these figures represent properties brought in regional Victoria.
Home Buyer Fund
The Victorian Government has implemented a new $500 million fund to assist home buyers with their deposit. As the Victorian property market becomes more competitive and expensive, the Home Buyers Fund helps to alleviate some associated financial burden. This new initiative provides an opportunity to compete in such a market.
Home buyers will now only to pay up to 5% deposit (3.5% for Aboriginal and Torres Strait Islanders). The Victorian Government will then add an additional 25% of the property’s price. The remaining 70% would be financed by the home buyer’s chosen lender. Eligible home buyers will also have the ability to buy back the Government share over time.
These measures will let aspiring home buyers access properly resourced and provisioned home loans. Notably, recipients of the assistance do not need to be first home buyers.
When buyers decide to sell the property, the Government’s interest will be returned to the fund in order to help other potential buyers. However, the value of the property cannot be more than $950,000 in Melbourne and Geelong, or $600,000 for the rest of the state.
Recipients of the assistance will need to earn $125,000 or less per annum, or $200,000 or less per annum for joint applicants. You also cannot own shares in a private company with a relevant interest in any land. Neither can you be buying the property from a related party.
Like the Home Owners Grant, recipients of the Home Buyer Fund must live in the property as their principal place of residence.
Check if you’re eligible here.
Ready to buy you first home and need help, read more about the process here.
Additional Home Assistance Packages
First home buyers in Victoria can combine these schemes with multiple other state and federal assistance initiatives as well as stamp duty concessions. This could save you tens of thousands of dollars.
This includes:
To check your eligibility or to speak with our team of trusted conveyancers and property lawyers, please get in contact with Action Conveyancing today on 03 9510 9888.