Shared Equity Home Buyer Helper

Shared Equity Home Buyer Helper

For the next two financial years, the New South Wales Government (NSW Govt) will share the cost of buying up to 6000 principal places of residence for people who could not otherwise own a home.

Provided they do not already own property here or overseas, the scheme is aimed at:

  • single parents with at least one dependent child
  • singles over 50 years of age
  • first home buyers who are nurses, midwives, paramedics, teachers, early childhood educators or police officers (if married or de-facto your spouse must be included in the application)

The scheme is open to Australian Citizens, Australian Permanent Residents and NZ Citizens (and their spouses, where applicable), aged at least 18 years old.

To apply you must be approved for a loan through an approved lender (currently only Bendigo Bank is approved) and have a minimum 2% deposit.

Edibility criteria includes:

  • Property purchase price limits
  • Income and asset tests
  • A requirement to grant a second ranking mortgage to the NSW Govt
  • Signing a participation agreement

What is the income test?

  • A single person cannot earn more than $90,000 a year
  • A couple cannot earn more than $120,000 a year

What are Assets?

Assets are:

  • Cash, savings, gold, etc (note savings of over $100,000 may be directed towards reducing the NSW Govt’s contribution)
  • Shares bonds investments, etc
  • Loans
  • Funds received from superannuation funds but not superannuation investments
  • Fixed assets of a business
  • Luxury items
  • Any other financial asset the Chief Commissioner considers relevant for determining liability

What are the Asset Limits?

The Asset limits are:

  • Joint applicants with an annual gross income of more than $90,000 cannot have assets exceeding 30% of the purchase price
  • Joint applicants with a combined gross income up to $90,000 and single applicants aged 18 to 49 cannot have assets exceeding 45% of the purchase price
  • Single applicants over 50 cannot have assets exceeding 65% of the purchase price

What are the Purchase Price Limits?

  • If you are buying in Sydney, Newcastle, Lake Macquarie, Central Coast, Illawarra and the North Coast of NSW (which includes Mid-North Coast, Coffs Harbour-Grafton and Richmond-Tweed) the maximum price you can pay for a home is $950,000
  • If you buy in other regional areas of NSW the maximum price you can pay for a home is $600,000

How much will the NSW Govt contribute to the price?

Up to 40% of the market value for a new property and up to 30% of the market value for an existing property.

Ongoing obligations to Remain Eligible

Once you are in the scheme Revenue NSW will undertake a compliance review every 2 – 5 years. To remain eligible you cannot:

  • Exceed the relevant income threshold in two consecutive financial years
  • Cease to be an Australian Citizens, Australian Permanent Residents and NZ Citizens
  • Own additional property
  • Cease using the property as your principal place of residence

If you are no longer found to be eligible you may be required to refinance or make a payment to acquire the NSW Govt’s interest in the property depending on your circumstances.

It is your obligation to notify Revenue within 3 months if your circumstances change.

Ongoing obligations regarding the Property

Once you are in the scheme you must:

  • Make your loan repayments
  • Keep the property insured
  • Pay Council and water rates
  • Pay Strata Levies
  • Maintain the property
  • Ask permission for major renovations

What other costs should I consider?

You are responsible for all other costs of the purchase. This includes:

  • NSW Govt Transfer Duty on the price (stamp duty)
  • legal fees
  • land registry registration fees
  • pest and building reports
  • any other cost involved in acquiring the property.

First Home Buyers can still apply separately for other first home buyer initiatives like First home Buyer Assistance, First Home Owner Grant and First Home Buyer Choice in addition to using the scheme.

During the life of the scheme you can buy out the NSW Govt subject to minimum buy back amounts.

Current feedback is the one approved lender has been inundated with applications so the scheme is proving to be popular already.

For further information, please contact our Property Team.

Our Property Lawyers