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Nearly 30 per cent of Victorians currently eligible for the state’s Homebuyer Fund would no longer qualify for the federal government’s proposed Help to Buy scheme as a result of stricter income limits and reduced property price caps.
A report from the Parliamentary Budget Office (PBO) has revealed that 668,800 Victorian residents – representing 29.4 per cent of those currently eligible for the state-funded Homebuyer Fund – would not be able to access the federal government’s Help to Buy scheme.
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This research has been undertaken after the Victorian government revealed in the state’s 2024–25 budget that it would close the Homebuyer Fund to new entrants once the federal government’s proposed Help to Buy scheme is legislated and established.
On 11 June 2024, Rachel Payne MP, member for the South-Eastern Metropolitan Region of Victoria, asked the PBO to project how many Victorians would lose access to a shared equity scheme through the transition to the Help to Buy scheme.
The PBO’s report found that single-income applicants with no dependents would only be eligible for Help to Buy if their yearly income is below $90,000, a marked decrease from the Victorian scheme’s limit of $135,155.
Under the new scheme, the income thresholds for single-parent applicants would decrease from $216,245 to $90,000, while joint applications would see a reduction from $216,245 to $120,000.
The report also determined that the maximum property price threshold would fall under the new system, decreasing by 10.5 per cent to $850,000 for houses in Melbourne and Geelong, and reducing by 7.1 per cent to $650,000 for property in the rest of Victoria.
Critically, the PBO also said that the reduced property price thresholds would lead to 7.8 per cent, or 10,000 of Victorian property sales estimated to qualify for the Homebuyer Fund in 2024–25, no longer being eligible under Help to Buy.
According to the report’s findings, 2,701 Victorian property sales or 2.1 per cent of the state’s total home purchases over 2022–23, were completed under the state’s Homebuyer Fund, a scheme set to be replaced by the federal government’s proposed Help to Buy initiative.
This legislation was previously featured as a key election promise of the Labor government in 2022 and has since been continually stalled in the Senate, with the Greens and Coalition recently voting in mid-September this year to table the issue until November.
Earlier this week, the Greens proposed backing the legislation in exchange for the Labor government funding 25,000 affordable and social housing projects that were excluded from the first round of the Housing Australia Future Fund (HAFF).
This proposal was rebuked by Housing Minister Clare O’Neil, who in a recent ABC News appearance urged the Greens to “act ethically” and negotiate “seriously”.
[Related: Housing is a major election issue for almost 9 in 10 Australians]
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