Are you tired of feeling like homeownership is out of reach? The NSW Government has a solution for you: Shared Equity Home Buyer Helper. This program is designed to make homeownership more achievable for single parents, older singles, and first home buyer key workers.
Through Shared Equity Home Buyer Helper, the NSW Government is providing support and opportunities for those with lower incomes to live in their own home. The government's contribution means a smaller deposit and lower monthly repayments for eligible applicants.
So, how does it work? For those who qualify,
·the NSW Government will contribute up to 40% of the purchase price for a new dwelling
·and 30% for an established property, in exchange for an equivalent interest in the property.
·This interest is secured by way of a registered second mortgage.
·There are no payments required to the government while the participant remains eligible for the program.
·Participants even have the option to make voluntary payments to increase their share in the property.
Participants will be responsible for all purchase costs, including stamp duty. They will also remain eligible for first home buyer programs and any stamp duty or land tax concessions. To remain eligible, participants must occupy the property as their principal place of residence and meet ongoing requirements, including property maintenance, insurance, and periodic reviews. They will also be responsible for ongoing property costs such as council rates, body corporate fees and utilities.
When the property is sold, the NSW Government will share in the gains or losses with the participant from the sale.
The initiative is open to:
Single parents of dependent children
Single people aged 50 or above
First home buyer key workers who are nurses, midwives, paramedics, teachers, early childhood educators, and police officers.
To be eligible, you must:
Have a gross household income of no more than $90,000 for singles and $120,000 for couples
Buy a home with a property price no more than $950,000 in Sydney and major regional centres or no more than $600,000 in other regional areas
Be at least 18 and an Australian or New Zealand citizen, or a permanent Australian resident
Have a minimum deposit of 2% of the purchase price
Occupy the property as your principal place of residence
Single parent and older single applicants must not own an interest in any other land or property at the time of settlement on the newly purchased property. First home buyer key workers and their spouse/partner must not have previously owned an interest in any land or property in Australia.
A purchaser will need to maintain eligibility for the Scheme and the ongoing obligations include:
Annual review – in order to confirm eligibility for the Scheme, the purchaser is required to undergo an annual review. The purchaser will be required to supply documentation which confirms their eligibility.
Maintenance and improvement of property – it is an obligation under the Scheme that the purchaser maintains the property. Further, certain modifications or renovations need to be approved by the Government. This requirement, ensures that any value changes to the property are accounted for in the eventual sale of the property.
Responsibility for property costs – it is the responsibility of the purchaser to pay the following costs, council rates, body corporate fees, water and home loan repayments.
Disadvantages of the Scheme
Whilst the scheme allows first homebuyers to get into the property market, there are some disadvantages that a purchaser should consider:
1.Not all lenders offer mortgages for shared ownership;
2.if the purchaser’s circumstances improve, they will begin repayments of the government equity contribution on top of the mortgage;
3.The purchaser is required to pay 100% of the property costs regardless of their share of the property;
4.Generally shared ownership arrangements are sold on a leasehold basis; and
5.There may be restriction on what home improvements the purchaser can do on the property.
The state Labour party have already announced that if they win the upcoming election, they will be scrapping the scheme.So that does not really help to create certainty. Also, some are comparing the idea to investing in your own government housing home.But if this is a program you can use to get started, on the path to owning your own home, it is better than nothing.
Make sure you check the official revenue NSW website’s or consult with a good broker & conveyancer who can help navigate the many schemes and give professional advice on your property’s eligibility for these incentives, they change frequently and are hard to track. As always, talk with your financial advisor or accountant to see how the opportunity might be best for you.