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Victoria’s $500 million home-buyer fund

Big news! Victoria has launched a new $500 million home-buyer fund. And the best part is that it is not just open to First Home Buyers.

How does it work?

The Victorian Government will pay 25% of the property purchase price if the eligible borrowers have a 5% deposit. The Victorian Government, however,  will then also own 25% of the property. Don’t worry though, you will be able to purchase the Victorian Goverments holding in your property down the line at the prevailing market price. The participant puts in the 5% deposit and finances, Victoria stumps up 25%, and the remaining 70% can be borrowed by eligible participants via one of the mortgage lender participants, which currently include Bank Australia and Bendigo Bank. Aboriginal and Torres Strait Islander home buyers can buy with a deposit as low as 3.5% and receive a government contribution of up to 35%, in exchange for an equivalent share in the property.

Am I eligible?

To be eligible to participate, home buyers need to:

  •  Be an Australian citizen or permanent resident over the age of 18 years

  • Not currently have an interest in a property

  • Have a gross annual income of $125,000 per annum or less for individuals or $200,000 or less per annum for joint applicants

  • Be a person (that is, not an organisation, company, trust or other body or entity)

  • Occupy the purchased property as your principal place of residence

  • Not purchase the property from a vendor who is related

  • Not own any interest in any land at the time of purchase (including as trustee of a trust or beneficiary under the 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

  • If subsequent assessments by the state and a participating lender are approved, eligible participants must become registered owners of the property they purchase.

Which locations are eligible to buy?

Eligible participants can purchase in any location in metropolitan Melbourne and will be provided with regional Victorian options when searching for a property. Property price caps are $950,000 in metropolitan Melbourne and Geelong, and $600,000 in regional Victoria excluding Geelong. The purchase can be for an existing or new property provided that a certificate of occupancy has been issued prior to the date of the contract of sale, meaning that off-the-plan property purchases are not eligible. The property must be vacant when purchased, or, if under a lease, the lease must expire within 12 months of the acquisition date and any tenants must vacate the property.

What does this mean for Australian residents outside of Victoria looking to take advantage of this fund?

Because you will need to live in the property to participate in the fund, you will need to either move into the property immediately if it is vacant upon purchase, or directly following the end of an existing lease that does not exceed twelve months from the property purchase date. In either case, a move to Victoria is required.

The Victorian Government expects to help over 3,000 Australians own their dreams

It is never too early or too late to chase your dreams. If you are on the hunt for a property purchase in Victoria and do not currently own property, this $500 million fund may just be the helping hand you are looking for 😊 Buying property is one of the biggest money decisions you’ll make in your life, so put in the work to get it right. Get good help around you so you cover all your bases and can confidently buy property knowing you’re on the right track from the moment you make your purchase! If you would like to find out more about Raiz Home Ownership, please contact the team at home@raizhomeownership.com.au, or register your interest.

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Important Information If you have read all or any part of our email, website, or communication then you need to know that this is factual information and general advice only. This means it does not consider any person’s particular financial objectives, financial situation, or financial needs. If you are an investor, you should consult a licensed adviser before acting on any information to fully understand the benefits and risk associated with the product. This is your call but that is what you should do. You may be surprised to learn that RAIZ Invest Australia Limited (ABN 26 604 402 815) (Raiz), an authorised representative AFSL 434776 prepared this information. We are not allowed, and have not prepared this information to offer financial product advice or a recommendation in relation to any investments or securities. If we did give you personal advice, which we did not, then the use of the Raiz App would be a lot more expensive than the current pricing – sorry but true. You therefore should not rely on this information to make investment decisions, because it was not about you for once, and unfortunately, we cannot advise you on who or what you can rely on – again sorry. A Product Disclosure Statement (PDS) for Raiz Invest and/or Raiz Invest Super is available on the Raiz Invest website and App. A person must read and consider the PDS before deciding whether, or not, to acquire and/or continue to hold interests in the financial product. We know and ASIC research shows that you probably won’t, but we want you to, and we encourage you to read the PDS so you know exactly what the product does, its risks and costs. If you don’t read the PDS, it’s a bit like flying blind. Probably not a good idea. The risks and fees for investing are fully set out in the PDS and include the risks that would ordinarily apply to investing. You should note, as illustrated by the global financial crisis of 2008, that sometimes  not even professionals in the financial services sector understand the ordinary risks of investing – because by their nature many risks are unknown – but you still need to give it a go and try to understand the risks set out in the PDS. Any returns shown or implied are not forecasts and are not reliable guides or predictors of future performance. Those of you who cannot afford financial advice may be considering ignoring this statement, but please don’t, it is so true. Under no circumstance is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz Invest or Raiz Invest Super. This information may be based on assumptions or market conditions which change without notice and have not been independently verified. Basically, this says nothing stays the same for long in financial markets (or even in life for that matter) and we are sorry. We try, but we can’t promise that the information is accurate, or stays accurate. Any opinions or information expressed are subject to change without notice; that’s just the way we roll. The bundll and superbundll products are provided by FlexiCards Australia Pty Ltd ABN 31 099 651 877 Australian credit licence number 247415. Bundll, snooze and superbundll are trademarks of Flexirent Capital Pty Ltd, a subsidiary of FlexiGroup Limited. Lots of names, which basically you aren’t allowed to reproduce without their permission and we need to include here. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Incorporated. Home loans are subject to approval from the lending institution and Raiz Home Ownership makes no warranties as to the success of an application until all relevant information has been provided. Raiz Home Ownership Pty Ltd (ABN 14 645 876 937), an Australian Credit Representative number 528594 under Australian Credit Licence number 387025. Raiz Home Ownership Pty Ltd is 100% owned by Raiz Invest Australia Limited (ABN 26 604 402 815).

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