Shared equity scheme
The NSW Government is launching a shared equity trial scheme to make home ownership more achievable for single parents, older singles and key worker first home buyers.
What is the shared equity scheme?
The NSW Government will pay a proportion of the purchase price of a property in exchange for an equivalent ownership share of the property. The NSW Government equity contribution is up to 40 per cent of the purchase price of a new dwelling and up to 30 per cent of the purchase price of an existing dwelling.
The purchaser must have a minimum deposit of 2 per cent of the purchase price, with no lenders mortgage insurance required.
No repayments are required on the equity contribution and no rent or interest will be charged while a participant remains eligible for the scheme. Participants can make voluntary payments to progress to full ownership of their property.
The shared equity scheme is open to:
- a single parent of a child or children under 18 years of age
- a single person 50 years of age or above, or
- first home buyer key workers who are nurses, teachers or police.
The gross income of the household must be no more than $90,000 for singles and $120,000 for couples.
The participant must be buying a home with a property price less than $950,000 in Sydney and major regional centres (Newcastle, Lake Macquarie, Illawarra, Central Coast, North Coast of NSW) or less than $600,000 in other regional areas.
The participant must be at least 18 years of age and be an Australian or New Zealand citizen, or a permanent Australian resident.
The participant must have a minimum deposit of 2 per cent of the purchase price.
The participant must occupy the property as their principal place of residence.
The participant must not own an interest in any land in Australia or overseas at the time of purchase.
The participant must not be able to service the mortgage for the property purchase without the Government equity contribution but be able to service the mortgage with a participating lender with the Government equity contribution.
All purchasing and selling costs (including stamp duty) are the responsibility of the participant.
Participants in the shared equity scheme would remain eligible for First Home Buyer assistance and any duty or land tax concessions.
To maintain eligibility, participants’ ongoing obligations include:
- Annual review: Each year following the property purchase, scheme participants will be required to complete an annual review and provide supporting information to ensure their continued eligibility for the shared equity scheme.
- Maintenance and improvement of property: Participants are required to maintain their property and keep things in good working order. The Government must approve certain modifications or renovations so that the value of this changes can be factored into the eventual sale price of the property.
- Responsibility for property costs: Property costs such as council rates, body corporate fees, water and home loan repayments are the responsibility of the participant.
A participant will be required to begin repayment of the Government’s equity contribution in certain situations, including where they no longer meet eligibility criteria. Revenue NSW will work with participants in meeting this obligation.
If a participant’s income exceeds the applicable threshold on two consecutive annual review reporting dates, they will be required to begin repayment of the Government’s equity contribution.
The scheme is planned to begin in January 2023 and will accept applications during two financial years (2022-23 and 2023-24). There will be 3,000 places per financial year.
Single parent in Sydney
For an eligible single parent in Sydney buying a new home at the maximum price of $950,000, the 40 per cent equity contribution would be a maximum saving of $380,000. This equity contribution would lower monthly mortgage repayments by around $1,800 (assuming an interest rate of 4 per cent over a 30 year term).
First home buyer teacher in Wagga Wagga
For an eligible first home buyer who is a teacher in Wagga Wagga buying an existing home at the maximum price of $600,000, the 30 per cent equity contribution would be a maximum saving of $180,000. The equity contribution would lower monthly mortgage repayments by around $860 (assuming an interest rate of 4 per cent over a 30 year term).
Contact us for further information
Information about the shared equity scheme can be obtained from Service NSW on 13 77 88.
Frequently asked questions
The NSW Government will contribute up to 40 per cent of the purchase price of the property in exchange for an equivalent ownership share in the property to assist eligible single parents with dependent children, singles older than 50 years and key worker first home buyers to purchase their own home.
The scheme is planned to begin in January 2023. Applications will be accepted during two financial years (2022-23 and 2023-24). There will be 3,000 places per financial year.
The maximum NSW Government equity contribution is up to 40 per cent of the purchase price of a new dwelling and up to 30 per cent of the purchase price of an existing dwelling. There are no required repayments on the equity contribution while you remain eligible for the scheme.
The minimum deposit is 2 per cent of the purchase price with no lenders mortgage insurance required.
The maximum value of property that can be purchased is $950,000 in Sydney and major regional centres, and $600,000 in other areas of NSW.
The process for applying for a shared equity place will be set out on the approved lending partner’s website before the scheme is planned to commence in January 2023. When the scheme is opened for applications, you will be able to apply through the website of an approved lending partner.
No, a home buyer would only be able to benefit from one of the shared equity schemes.
Yes, the shared equity scheme does not affect other tax arrangements for first homebuyers. An eligible first home buyer would be able to claim a stamp duty exemption or concession.
All other duty concessions are also applicable and full duty is charged if the purchaser is not eligible for any exemptions or concessions.
The Government’s lending partner will advise on the percentage of equity contribution that would be accessible after conducting a lending assessment.