The New South Wales Government is planning a shared equity trial scheme that will allow single parents, older singles, and key worker first home buyers to purchase homes. The NSE government will pay a portion of the purchase price of a property. But the Government will receive an equivalent ownership share in the property. In this help to buy scheme, The NSW Government may offer up to 40 percent of the purchase price of a new dwelling or up to 30 percent of an existing dwelling. The New South Wales government has introduced a number of schemes to stimulate home ownership.
If a person purchases a house with a down payment of at least 2 percent of the purchase price, there is no requirement for lenders to give mortgage insurance. Participants in the shared equity scheme do not have to make any payments on the equity contribution and will not be charged rent or interest during their enrollment period. The participants in the program can buy shares in the property via voluntary payments to gain full ownership.
Eligibility Criteria For Shared Equity Scheme
The shared equity scheme is offered to:
- A single person whose age is 50 or above
- A single parent of children under 18
- First home buyer key workers who are teachers, nurses, or police
For singles, the gross income of the household must not exceed $90,000. For couples, the gross income of the household must not exceed $120,000. Only homes costing less than $950,000 in Sydney and major regional centers and $600,000 in other regional areas are eligible for this help to buy scheme. For this activity, participants must be at least 18 years of age and be citizens of Australia or New Zealand. The applicant must have a minimum deposit of 2 percent of the purchase price to participate in the shared equity scheme. The property must be the participant’s principal place of residence. A resident cannot own interest in land in Australia or overseas while purchasing a house. The participant cannot afford to purchase the property without the Government’s equity contribution.
Transaction costs of Shared Equity Scheme
The participant is responsible for all costs (including stamp duty) involved in the transaction. Participants in this help to buy scheme would not be disqualified from receiving First Home Buyer assistance and any duty or land tax concessions.
Shared Equity Scheme Commencement
The application period will begin in January 2023 and run for two financial years. The help to buy scheme will offer 3,000 places in each financial year.
Single parent in Sydney
For a single parent in Sydney, the maximum equity contribution into a new home worth $800,000 would amount to a saving of $320,000. The equity contribution would reduce your monthly mortgage payments by 4% which are around $1,600 over a 30-year term.
First home buyer teacher in Illawarra
For a teacher in Illawarra, buying an existing home at the maximum price of $500,000, the 30 percent equity contribution would amount to a maximum savings of $150,000. The equity contribution will reduce your monthly mortgage repayments by $720 over 30 years.
Frequently Asked Questions
The government will work with its lending partner to determine how much of the loan’s funding would be available to the borrower after an equity contribution.
The shared equity scheme does not change the way first homebuyers are taxed. If you’re buying your first home, you may be eligible for a concession or exemption from stamp duty. If a person is not eligible for any duty exemptions or concessions, full duty is charged.
The process for applying to this help to buy scheme will be posted on the approved lending partner’s website by January 2023. When the scheme is open for applications, you will be able to apply on the website of an approved lender.
No, the homeowner cannot benefit from the two help to buy schemes. He would be able to enroll in the only scheme.