A good idea for first home buyers
Every time a home is bought in Victoria the deposit is placed in a special account and the interest on that account is paid to the Victorian Property Fund. The fund exists to compensate home buyers in case there is a defalcation. Thankfully, it’s so rare that the fund contains over $300M.
The REIV believes that a program from Western Australia that uses these funds to help first home buyers should be looked into at this state election. In Western Australia a Home Buyers Assistance Account is offered to first home buyers, funded from the WA equivalent of the Victorian Property Fund.
This is offered because buying your first home is a difficult exercise – it requires a considerable period of saving in order to build the required deposit and an often lengthy search to find the home that meets your needs and budget. When it comes to the actual purchase, the extras that are required – building and pest inspections, conveyancing fees, government fees and charges – end up eating away at the hard-earned and saved deposit.
While some costs, such as conveyancing and government fees and charges, are unavoidable, others might not be incurred at all due to the high cost of the property. A good example is building and pest inspections. The problem is these expenses are good ideas and are best not avoided as they are an important step in researching a property as they amount to due diligence on the biggest and most important purchase the buyer will probably ever make.
In WA they use their equivalent of the Victorian Property Fund to provide first home buyers with up to $2,000 for use on professional services and incidental expenses incurred in a residential property purchase.
A similar scheme, capped for homes with a purchase value of $750,000 or less, should be offered in Victoria as it would be of great assistance to first home buyers.