Homes for Homes aim to tackle Australia’s chronic shortage of affordable housing by creating a new, sustainable funding stream. The initiative generates funding as a property is sold, continuing to do so with each subsequent sale, as long as the permissive caveat stays on the title.
What is Homes for Homes?
Homes for Homes is an initiative of The Big Issue, a not-for-profit social enterprise that has been operating for 21 years.
Homes for Homes aim to tackle Australia's chronic shortage of affordable housing by creating a new, sustainable funding stream. The initiative generates funding as a property is sold, continuing to do so with each subsequent sale, as long as the permissive caveat stays on the title. It neatly integrates into existing property settlement processes by using a permissive caveat as an instrument. It will operate on a national level as all states perform property transactions and are familiar with caveats. Currently, Homes for Homes has the permissive caveat in place in ACT, and properties in various other states have made commitments to lodge a Homes for Homes permissive caveat.
How it works?
- The Homes for Homes permissive caveat is put on a property. This is done voluntarily by homeowners, developers and builders.
- The vendor discloses the permissive caveat to the purchaser through a special condition on the Contract of Sale.
- When this property is sold, the vendor donates 0.1 per cent of the property's sale price to Homes for Homes.
- At settlement, the permissive caveat stays registered on the property, and Homes for Homes provides an original Caveator's Consent allowing for other dealings to be registered as priority on the property.
- Once the purchaser has been registered as a proprietor, they can contact Homes for Homes to remove the caveat. This does not incur any cost to the purchaser as the ACTLIS (LTO) have agreed to waive the withdrawal of caveat fees for any Homes for Homes caveats.
- If the new registered proprietor has chosen to leave the permissive caveat on title, when they decide to sell their home. they will then also make a tax-deductible donation of 0.1 per cent of the property's new sale price.
- The permissive caveat is passed on from owner to owner, generating long-term funding within the state of which the property is located.
- Housing providers apply for the funding to build more social and affordable dwellings. Money raised in the state, stays in the state.
How is the Homes for Homes permissive caveat different to other caveats?
This permissive caveat to Homes for Homes will appear like a normal caveat on the title search. The differences to this caveat are:
- In most cases no Withdrawal of Caveat form will be collected at settlement, as the idea is to keep this permissive caveat on title to keep producing funding with each sale.
- An original Caveator's Consent will be required to be provided at settlement by Homes for Homes, which is lodged together with the title, allowing registration of other dealings to take priority.
- This caveat is not a barrier to incoming mortgagees as it does not prevent lodgement of new dealings and is only a signal that the registered proprietor has agreed to donate to a good cause.
- In the case where the purchaser wants to remove the permissive caveat, there is no Withdrawal of Caveat fee involved for this caveat as the LTO in ACT has agreed to waive it.
Support for Homes for Homes
Capital Airport Group is developing a new suburb in the ACT, Denman Prospect. They have committed to donate 0.1 per cent of the sale price for each block they sell in this suburb. Furthermore, they are putting the Homes for Homes permissive caveat on every contract, making Denman Prospect the first suburb in Australia to fully commit to the cause. This gives a large boost to the number of properties with the caveat. Homes for Homes anticipate that the permissive caveats will stay on the titles in the future, allowing for more funding to help solve this important issue.
So far there have been approximately 300 dwelling sites sold in Denman Prospect, with another 2,000 planned for staged releases.
The federal government has also shown great support to this cause by investing $6 million towards the Homes for Homes initiative in June 2017.
Based on conservative estimates, Homes for Homes is projected to raise over $1.8 billion in the next 30 years.
For further information visit homesforhomes.com