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The state’s key workers, single parents and older singles can tap into the government’s shared equity scheme after it became law.
The NSW government’s multimillion-dollar shared equity scheme will see the state government make a maximum equity contribution of 40 per cent for a new home and 30 per cent for an established home, after the home buying scheme was passed in Parliament.
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The $780.4 million scheme will provide 6,000 teachers, nurses, police officers, single parents, and older singles borrowers the opportunity to own their home sooner with a minimum 2 per cent deposit without the “burden” of lenders mortgage insurance and no interest on the government’s equity share in a property, Premier Dominic Perrottet said.
“They will benefit from the security of their own home sooner, with a lower deposit, smaller loan and less in repayments,” Mr Perrottet said.
Under the scheme, up to 3,000 spots will be available each year (over the next two years beginning in 2023) and participants must have a maximum gross income of $90,000 for singles and $120,000 for couples.
In addition, the maximum value of the property that can be purchased is $950,000 in Sydney and regional centres including the Central Coast, Illawarra, Lake Macquarie, Newcastle and the North Coast of NSW and $600,000 in other parts of NSW.
Participants in the scheme would remain eligible for first home owner grants and any stamp duty exemptions or concessions.
Indeed, saving for a deposit is a huge barrier to home ownership, particularly as inflation tips 7 per cent and global fears of a recession escalate.
Given this, Minister for Homes Anthony Roberts said lowering upfront costs was important to ensure more people have access to home ownership.
“Lower upfront costs will allow more lower-income households to buy their own homes,” Mr Roberts said.
“Buyers will be able to borrow less for their home and pay lower monthly mortgage repayments, reducing the level of risk they’re taking on, especially with the likelihood of future interest rate increases.”
The shared equity scheme forms part of the NSW government’s $2.8 billion Housing Package launch.
Meanwhile, at a national level, the Labor government committed $329 million towards its Help to Buy scheme that allows up to 40,000 eligible Australians to own their own home with a lower deposit and smaller mortgage.
Similarly, the scheme will enable eligible home buyers to purchase a property with a minimum deposit of 2 per cent, with the federal government’s equity contribution of up to a maximum of 40 per cent of the purchase price of a new home and up to a maximum of 30 per cent of the purchase price for an existing home.
Home buyers will not be required to pay rent on the stake of the home held by the federal government as well as be exempt from lenders mortgage insurance.
Other states such as Western Australia and Tasmania already operate their own iterations of the program. Victoria launched its own $500 million shared equity scheme late last year.
[Related: 500 Victorians buy homes under shared equity scheme]
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