Good News For First Time Home Buyers

As of the 8th of October, 2021, the State Revenue Office in Victoria has made certain people eligible to receive the new Homebuyer Fund.

This fund makes it significantly easier for first-time homebuyers to purchase their first home or parcel of land.

For most eligible Australians, up to 25% of their property’s purchase price is covered by the Homebuyer Fund.

With the Homebuyer Fund, most eligible Australians now only need to save up to 5% of the total cost of the property they are buying in order to make an initial deposit.

With 5% being covered by the buyer, and 25% being covered by the government, the remaining 70%, of course, may be covered by a lender.

HomeBuyer Fund: Aboriginal or Torres Strait Islander Home Buyers

First-time homebuyers who are Aboriginals or Torres Straight Islanders who are eligible for the Homebuyer Fund will receive benefits similar to the ones above, but in higher number.

For Aboriginal or Torres Straight Islanders who are eligible for the Homebuyer Fund, 35% of their property’s purchase price will be covered by the fund.

They will be required to cover 3.5% of the total purchase themselves in an initial deposit.

Eligibility for HomeBuyer Fund

To be eligible for the Homebuyer fund, it is required that you:

  • Are an Australian or New Zealand Citizen, or a permanent resident in Australia
  • 18 years old or older
  • Are able to pay the minimum initial deposit (5% or 3.5% of the total price, as mentioned above)
  • Earn a gross annual income of less than $125,000.
  • Intend to use the property as your principal place of residence.
  • Buy a property from someone who is not related to you
  • Do not own any interest in any land (including a land trust)
  • Are not a shareholder of any company, or a corporation that owns land
  • Buy the property as a “natural person” and not as a business, trust, organisation or company
  • Buy a property in one of the approved zones

 Shared Equity

In return for covering up to 25% of the cost of your property, the State will acquire a share of your property.

The Homebuyer Fund is a Shared Equity Scheme, it’s not a charity.

As the price of your property fluctuates within the market, so will the value of the State’s share in your property.

If you want to own the entirety of your property, you need to purchase the State’s share from the State, which you are expected to do once you are financially ready.

Obligations and Agreements With The State

If you purchase a property through the Homebuyer Fund, you will be required to do several things to maintain your eligibility for it.

The State will not be happy to hold a share in your property without certain things being in place.

To ensure that the State will continue to hold a share in your property, you will need to do the following:

  • Have your property always be covered by adequate insurance
  • Keep your property well-maintained
  • Have all renovations, or rebuilding, done legally
  • Pay utility bills, body corporate fees, stamp duty, home loan repayments and other payments by their due dates


There comes a time when you must start repaying the State for the Homebuyer Fund if you have purchased a property with its help.

The State doesn’t want to hold a share in your property forever.

You are required to start repaying the State’s interest in your property when:

  • Your gross annual income exceeds $125,000 on two consecutive annual review dates
  • You receive $10,000 or more through gaming or inheritance
  • You have made a mandatory payment, your gross annual income has increased by 10% or more, and you have gained permission from your lender to increase your home loan (permission that you are expected to try and gain if your gross yearly income has increased by 10% or more)

You have the option of simply buying some of the State’s share in your property provided that your payment is at least $10,000 and can reduce the State’s ownership of your property by an increment of at least 5%.

To buy out the entirety of the state’s share in your property or to reduce the state’s ownership of your property to less than 5% within the first two years of purchasing it, you need to first gain permission from the Homebuyer Fund team.

Help And Advice

Is the Homebuyer Fund for you?

It is a drastically more affordable option that can lead you to owning your first property, but the Homebuyer Fund is a financial commitment that requires you to keep the State happy while it owns a share in your new property.

On top of maintaining the support of a lender by paying your mortgage, you must continuously earn the Homebuyer Fund by paying for insurance, reporting your income and by being a model citizen (as far as bills and fees go).

Are the numbers difficult to crunch? Do you have questions about legal or financial support? Do you need a more solid, comprehensive and safe plan before you apply for the Homebuyer Fund? Are you first-time homebuyer in Melbourne and are feeling uncertain about all of these laws and obligations?

Tick Box Conveyancing provides you with all of the information you need to know about buying a property.

In our comprehensive and easy-to-understand pre-purchase report, we fill you in on all of the legal, financial and risk details that may otherwise remain obscure when you are buying and settling a property.

With our Melbourne Conveyancing, you will feel confident while purchasing your first property with the Victorian Home Buyer’s fund.

Call or email us for a free 10-minute booking.