New First Home Buyer Shared Equity Scheme

23 June 2022

Guarantor loans

New South Wales Treasurer Matt Kean announced a new first home buyer shared equity scheme in the State Budget this week. This scheme is in addition to the first home buyer transfer (stamp) duty scheme that was also announced.

Read on to find out everything you need to know about the shared equity scheme.

What is the new first home buyer shared equity scheme?

The scheme will allow eligible first home buyers to buy with a deposit as low as 2%. The NSW government will contribute 40% of the purchase price of a new home, or 30% of the purchase price of an existing home.

Significantly, buyers will not have to make any repayments on the government’ equity share unless they wish to do so. However, the government equity must be repaid if:

  • the property is sold, or
  • the buyer’s financial situation improves to the point where they are no longer eligible for the scheme.

Buyers who are eligible for the first home owner’s grant can participate in the shared equity scheme.

Eligibility requirements

The new scheme will be available to first home buyers who fall into at least one of the below categories:

  • single parents with at least one child under the age of 18.
  • older singles aged 50 and over.
  • nurses.
  • police officers.
  • teachers.

In addition, these first home buyers must fall within income and property value thresholds.

The maximum annual income threshold is $90,000 for singles and $120,000 for couples.

The maximum property value is $950,000 in Sydney and major regional cities like Newcastle and Lake Macquarie. It is $600,000 in other areas.

Buyers must be buying a home to live in under the scheme. Investment properties are not eligible.

Buyers must also be aged 18 or over and either an Australian or New Zealand citizen (or permanent Australian resident).

When will the shared equity scheme start?

Like the transfer duty scheme announced in the Budget, the shared equity scheme still has to be passed by parliament. The government is hoping this will happen by January. 3,000 places will be available in the scheme each year, and it will be trialled for two years.

Details of where to apply for the scheme will be announced later in the year.

How we can help

If you’re looking to buy your first home in the Newcastle, Maitland and Lake Macquarie areas and you need finance, talk to us. Our licensed and experienced brokers at Wisebuy Investment Group can help you to find the right loan for your needs.

We’ll take the time to find out your individual needs before matching you with a suitable lender. We work with more than 60 lenders in the Australian market, and we can help you with your loan application. Importantly, we work for property buyers, not lenders.

Contact us today for an obligation-free chat to find out more. We’d be happy to answer any questions you have and to explore your finance options with you.