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For many Australians, owning a home has never felt more difficult, and saving for a large deposit can often feel unachievable. The NSW Government has launched an initiative to help take some of the strain from buying a first home with the NSW Shared Equity Home Buyer Helper.
What is the Shared Equity Scheme?
The Shared Equity Home Buyer Helper was created by the NSW Government for eligible home buyers to be able to buy their own home with a minimum 2% deposit.
The initiative started in January 2023, and there are 3000 applications being taken each financial year (2022-2023 and 2023-2024). The initiative is meant for eligible applicants to be able to contribute only a small deposit and to pay lower monthly repayments on their mortgage.
How does it all work?
The NSW Government will put in a big part of the purchase price of your property of choice in exchange for the same amount of interest in your property. The contribution depends on whether it is a new home or an existing home.
For a new home, the Government will contribute up to 40%, and for an existing home, 30%. This means if the Government contributes 40% to your home, they own 40% interest in it, which will be recognised by a registered second mortgage.
This does not mean, however, that you need to pay the Government rent or even interest repayments while you are eligible. Yet, you can sequentially decrease the NSW Government’s share/interest in your property (the minimum payment for this is 5% of the property value) and increase your property share.
As an eligible applicant, you would be responsible for paying your stamp duty and ongoing property costs such as council rates, body corporate fees, and utilities. If you participate in The Shared Equity Home Buyer Helper, you will stay eligible for other first-home buyer programs and any other concessions on offer, for example, land tax and stamp duty.
In order to stay eligible as a participant, you would need to keep the property in question as your principal place of residence (your home) and subject yourself to some requirements, such as property maintenance, recurring reviews and property insurance.
When you do sell your property, the NSW Government will share in your gain or loss from the sale. The sale proceeds would be given out in this order:
- The participating lender
- The NSW Government (will take their interest share in the property and share in the gains or losses proportionately)
Who is eligible?
The Shared Equity Scheme is currently available for:
- First-home buyers who are police officers, nurses, midwives, teachers, paramedics, or early childhood educators
- Single parents of a dependent child or children
- Single people 50 years of age or above.
If you fit the eligibility standard above, you must also be buying a home in NSW and not buy above the maximum property price, dependent on the area (see below):
- $950,000 in Sydney and major regional centres (Newcastle and Lake Macquarie, Illawarra, Central Coast and North Coast of NSW), or
- $600,000 in other regional areas of NSW.
All eligible participants need to also be:
- 18 years or over
- An Australian or New Zealand citizen or a permanent Australian resident
- Have a minimum deposit of 2% of the purchase price
- Stay in the property as the principal place of residence
- Not currently own any land or property
- Not be capable of paying the mortgage for the property purchase without the government contribution but be capable of servicing the mortgage with a participating lender with the government contribution.
Get started with the Shared Equity Scheme. Chat with our experienced mortgage broker!
If you feel you might meet the criteria for this home-owning initiative in NSW, then it might be time to chat with your mortgage broker to determine the next steps. If you want to discuss this initiative or purchase a new home, please contact our experienced mortgage broker or call 02 4038 1623 to start the conversation.
Disclaimer: The information provided in this fact sheet is not legal, taxation or financial planning advice. It has been prepared without considering your specific needs, objectives and personal financial situation. Before acting on this information, we recommend that you consider carefully if it is appropriate for your needs, objectives and personal financial situation. All loan products are subject to lender criteria and approval. Fees, terms and conditions apply. Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product. Licensing Statement: Watson Mortgages Pty Ltd Credit Representative 525053 is authorised under Australian Credit Licence 389328.