Opening Doors in Ballarat: A Guide to the Victorian Homebuyer Scheme
Thinking about buying a home in Ballarat? The Victorian Government’s Homebuyer Guarantee Scheme could help you get there faster, with a smaller deposit and fewer upfront costs. Here’s what you need to know.
What Is the Homebuyer Guarantee Scheme?
The Victorian Homebuyer Guarantee is a shared equity scheme. The government contributes up to:
25% of the purchase price for most eligible buyers
35% for Aboriginal and Torres Strait Islander buyers
This means you only need a 5% deposit (or 3.5% for Indigenous buyers), and you won’t have to pay Lenders Mortgage Insurance (LMI), this could save you a whopping $30,000 on a $600,000 home.
In return, the government owns a share of your home, which you’ll need to repay in time. They secure this share in your property by registering a second mortgage on the title to your property.
Example
Purchase price $600,000
Deposit (5%) $30,000
Victorian Government Contribution (25%) $150,000
Bank loan (70%) $420,000
Who Can Apply?
To be eligible, you must:
Be an Australian citizen, permanent resident, or New Zealand citizen
Be at least 18 years old
Earn less than $140,230 per year (or $224,370 for joint applicants or single parents)
Have saved the minimum deposit (5%)
Plan to live in the home as your main residence until you can repay the loaned Government funds
Not currently own property in Australia or overseas
The purchase price of your home in Ballarat must be $700,000 or less
Benefits for Ballarat Buyers
Lower deposit = Just 5% needed
No LMI = Save thousands
Smaller loan = Lower monthly repayments
Faster entry = Get into the market sooner before property prices go up
As a first home buyer in Ballarat you will also be eligible for the stamp duty exemption. On a $600,000 purchase you will achieve the following estimated savings:
Stamp Duty $31,070
Lenders Mortgage Insurance (approx) $30,000
Annual interest repayments on 25% of loan $8,000
What Are the Risks?
While the scheme offers great support, it’s important to understand the risks:
Shared ownership: The government owns a portion of your home and shares in any profit or loss when you sell.
Repayment required: You’ll need to repay the government’s share eventually, through refinancing, savings, or sale.
Limited availability: The scheme is only available while funding lasts.
Property restrictions: Some property types (like stratum titles) aren’t eligible.
Final Thoughts
The Homebuyer Guarantee Scheme is a powerful tool for Ballarat residents looking to get back into the property market or buy their first home. But like any financial decision, it’s important to weigh the benefits and risks carefully.
You will have ongoing annual reporting requirements to make to the State Revenue Office if you take up this scheme. You will also need to have enough funds set aside (in addition to your 5% deposit) to pay for the banks valuation and fees, a building inspection, stamp duty (if applicable), Titles Office transfer fees and conveyancing fees.
The property must be a standard residential property such as a house, townhouse, unit or apartment and the purchase price must be less than $700,000 in regional Victoria.
The purchase can be for a new property provided that a certificate of occupancy has been issued prior to the date of the contract of sale. The property must also be vacant when purchased or, if under a lease, the lease must expire within 12 months of the settlement date and the tenants must vacate the property.
Only a few lenders have partnered with the Victorian Government, so you are limited to which lender you can loan the majority of your purchase price through. I have had personal experience with Bendigo Bank providing this scheme and it was a positive experience.
I hope this article has given you some clarity on the Homebuyer Scheme.
I am happy to discuss any questions you may have or your conveyancing needs on 0403 470 756.