Victorian Homebuyer Fund: A 25% government contribution towards your home

The Victorian HomeBuyer fund finished in 2025. For more shared equity schemes, the Federal Help to Buy scheme is launching soon.

The new Victorian Homebuyer Fund will allow more first homebuyers to realise the great Australian dream of homeownership sooner through a shared equity scheme.

The fund, announced in October, offers an affordable pathway for Victorians to purchase their own piece of paradise, with the Victorian Government estimating that the $500 million scheme will help more than 3000 first homebuyers purchase a new or existing home.

Under the terms of a shared equity scheme, the Victorian Government makes a financial contribution of up to 25% of the purchase price in exchange for a stake in the property. If your property grows in value over time, the government will take a share of this profit.

The Victorian government is trying to help more people get into the housing market. Picture: Getty

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Victorian Treasurer Tim Pallas said the Victorian Homebuyer Fund would help reduce barriers to first homeownership.

“It can take years to save for a deposit – through our Victorian Homebuyer Fund, more than 3000 Victorians are expected to enter their own home sooner,” Mr Pallas said.

“The pandemic has underscored the value of a secure, safe home to call your own – that’s what this program will provide for thousands of Victorians.”

The program comes after the government’s pilot $50 million HomesVic Shared Equity Initiative supported more than 335 households to buy their first home.

How does the Victorian Homebuyer Fund work?

The Victorian Homebuyer Fund is a shared equity scheme whereby the Victorian Government contributes towards the purchase of a residential home in return for a stake in the property.

Under the initiative, eligible homebuyers receive up to 25% towards the purchase price of their property, effectively reducing the minimum deposit required to 5% and avoiding the need to pay Lenders Mortgage Insurance.

Aboriginal or Torres Strait Islander homebuyers are entitled to an increased contribution from the fund – up to 35% of the purchase price, with a minimum deposit of 3.5%.

The fund is open to standard residential properties including houses, townhouses, units and apartments with a purchase price of up to $950,000 for metropolitan Melbourne or Geelong or $600,000 and under in other eligible regional areas. It is not open to a land transaction or off-the-plan sale.

Under the terms of the fund, as the value of the property changes, so too will the state’s stake in the home. This means the Victorian Homebuyer Fund will share in any gains in your property’s value.

Co-owners can repay the fund’s share in the property over time making repayments by refinancing, using savings or with proceeds of the sale of property.

Any new or existing home can be considered for the scheme. Picture: Realestate.com.au

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Who is eligible for the Victorian Homebuyer Fund?

There are several key eligibility factors that must be met before you can participate in the Victorian Homebuyer Fund. These include:

• Being an Australian citizen or permanent resident.
• Aged at least 18 at the time of settlement.
• Be an individual, not an organisation, company, trust or entity.
• Have saved the minimum deposit (5% or 3.5% depending on your circumstances) of your property price.
• Earn a gross annual income of $125,000 or less a year for individuals or $200,000 or less a year for joint applicants.
• Occupy the property as your principal place of residence.
• Not purchase the property from a vendor who is related to you.
• Not own an interest in any land at the time of the purchase, including as a trustee of a trust or beneficiary under a trust.
• Not be acting as a trustee of a trust.
• Not be a shareholder in any corporation (other than a public company) that owns any land.

Significantly, Victorian Homebuyer Fund participants are still eligible for other government housing schemes, including those aimed at helping first-homeowners get into the market.

You can use the Victorian government’s online tool to check your eligibility.

What properties and regions are eligible for the Victorian Homebuyer Fund?

The shared equity Victorian Homebuyer Fund is open to the purchase of standard residential properties including houses, townhouses, units and apartments, but is limited to metropolitan Melbourne, Geelong and selected regional towns.

It is available to homes with a purchase price of $950,000 or less in metropolitan Melbourne or Geelong; or up to $600,000 in other eligible regional areas.

New and existing properties can be purchases providing a certificate of occupancy has been issued before the date of the contract of sale. Off-the-plan and land transactions are not authorised.

Providing your house fits the criteria, you could be living in it much sooner with the help of the Victorian government’s homebuyer grant. Picture: realestate.com.au

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Homebuyer regions

To be eligible for the Victorian Homebuyer Fund, properties must be located in metropolitan Melbourne, Geelong and one of the listed regional locations. Eligible suburbs in regional Victoria include:

• Bacchus Marsh
• Bairnsdale
• Ballarat
• Bannockburn
• Benalla
• Bendigo
• Castlemaine
• Clifton Springs
• Colac
• Creswick/Clunes
• Daylesford
• Drouin
• Echuca
• Gisborne
• Horsham
• Inverloch/Wonthaggi
• Kilmore
• Korumburra
• Kyneton
• Latrobe
• Leongatha
• Leopold
• Maffra
• Mansfield
• Maryborough
• Mildura
• Ocean Grove/Barwon Heads
• Portarlington
• Portland
• Sale
• Seymour
• Shepparton
• Swan Hill
• Trafalgar
• Torquay
• Wallan
• Wangaratta
• Warragul
• Warrnambool
• Wodonga
• Woodend
• Yarrawonga

For a full list of eligible suburbs and towns, visit: www.sro.vic.gov.au/homebuyer-fund-eligible-locations

There are plenty of regions to select from when it comes to buying a home with the Victorian government’s homebuyer grant. Picture: realestate.com.au

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Who are the participating lenders?

Currently, there are two lenders for the Victorian Homebuyer Fund – Bendigo Bank and Bank Australia. Participants in this initiative must seek assistance from one of the two lenders and have an approved home loan before they can take part in the scheme.

Once provisional approval is granted, approved candidates have six months to purchase a property.

What are the ongoing obligations?

An approval to buy your own home through the Victorian Homebuyer Fund means you will have to meet several ongoing obligations. These include:

Fees and payments

As the homeowner, you are required to make payments of council rates, utilities, body corporate fees, stamp duty and home loan repayments on time.

Annual review

You will be required to complete an annual review each year after the purchase of your home and provide supporting information that shows you remain an eligible participant in the fund. This can include providing payslips, tax returns, home loan statements, utility bills and a certificate of currency of insurance. Participants in the scheme are required to contact the State Revenue Office within 10 business days if your circumstances change.

Insurance

Up-to-date insurance is a pre-requisite to involvement in the scheme and homeowners are required to provide a certificate of currency during each annual review.

Read more about home and contents insurance.

Maintenance

As a homeowner involved in the fund, you will be required to maintain your property and ensure it is in good working order and have defects fixed promptly. If you wish to renovate or make modifications, you must seek approval beforehand. This includes any structural changes that require council approval. In addition, if you would like to refinance, sell your property or make voluntary payments to exit the Victorian Homebuyer Fund within the first two years, you must first seek approval.

Repayments

As the homeowner, you will be required to start repaying the fund’s interest in your property when:

• Your gross annual income exceeds the applicable threshold on two consecutive annual reviews, or
• You receive a windfall gain, such as an inheritance or lottery win for $10,000 or more, or
• You have made a mandatory payment and your gross annual income has increased by 10% or more; and
• You are approved by your lender to increase your home loan.

You can make additional voluntary repayments to pay off the fund’s share in your home, so long as each repayment reduces the fund’s share by at least 5% and is at least $10,000.

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It is a requirement that you gain approval from the fund to pay the full amount back in the first two years. If the property is sold, the money must be distributed in the following order.

1. The bank to pay off the outstanding home loan.
2. The Victorian Homebuyer Fund to pay back its share in the property.
3. Anyone with legal or equitable interest in the property, for example the council rates.

How to apply

Applying for assistance to buy your first home under the Victorian Homebuyer Fund can be done online via the SRO website.

When do you need to start repaying the contribution?

There are several points you need to keep front of mind when it comes to repaying the government’s financial contribution on your home.

• You are required to repay the government’s financial contribution within the initial duration of the home loan period.
• If the home loan is paid off early, payment of the government’s contribution must be made within two years.
• You may also be required to pay the government’s contribution early if you breach the terms and conditions of the Participation Agreement or Program Mortgage.
• If you would like to repay some or all of the government’s financial contribution, the Victorian Homebuyer Fund will commission a valuation of the property by the Valuer-General Victoria to calculate the value of the government’s share in your home.

What are the pros and cons of using the Victorian Homebuyer fund?

What happens if I want to sell?

It is possible to sell a property acquired with the help of the Victorian Homebuyer Fund. Under the terms of your arrangement with the fund, you must notify the fund administrator and your bank at least 45 days before the sale.

You will also be required to sell your home through an independent process, such having a real estate agent manage the sale; and you will be responsible for meeting the full costs of selling, including any upfront expenses.

You are not permitted to sell your property within two years of settlement without the prior written consent of the SRO.

To get started, visit the SRO website.