November will mark 6 months since Labor came to power in the federal election.
Labor’s campaign saw them promise a ‘Help to Buy’ scheme, where the government would co-purchase up to 40% of the cost of a new home, or 30% of an established home. The plan aimed to help middle to low income and first home buyers.
Of course, federal housing policies and schemes need to be facilitated by state governments, each of which preside over different economies and housing markets.
Interestingly, a number of shared equity schemes already exist in the states.
Here’s where governments are pitching in on purchase prices.
NSW- Shared Equity scheme
The NSW Government is set to trial a shared equity scheme from early next year. The NSW contribution is up to 40% of the purchase price of a new property and up to 30% for an existing home, for borrowers with 2% of the purchase price as a deposit. No LMI is required. To be eligible, you must be a single parent, a single person aged 50 or older, or a first home buyer who is also a “key worker” (eg nurse, teacher, police). Your household income must also be less than $120k for a couple or $90k for a single and buying a home worth less than $950k in metro areas and $600k in regional towns.
Western Australia- Keystart scheme
Buyers can get a home with a deposit as low as 2%, no LMI and using the first home owners grant to contribute to the deposit if the home is a new build.
WA’s housing authority invests up to 30% of the value of the home and retains that portion of ownership, but buyers are free to pay more to increase their own share when able.
Participating lenders and available properties can be found on the government’s website, but interest rates paid on loans are higher than average variable rates paid by those with 20% deposits.
South Australia- Homestart finance
This shared equity option allows you to borrow between 5% and 25% of the total purchase price of the property as an interest free and repayment free loan, up to a maximum of $200,000.
While you pay off the remaining value, the government shares in the profit or loss of your home if you sell. Meanwhile, you can make voluntary repayments of $10,000 or more to HomeStart to eat into the government’s share of the home, on top of your normal repayments.The final payment on the loan includes the balance plus a portion of the gain or loss when you sell.
Victoria- Homebuyer fund
The Victorian version also requires a 5% deposit for a 25% purchase price contribution from the government and no LMI. Borrowers pay back the government its share over time. The income caps on these are $204k per couple, or $128k for a single income. The property purchased must also be under $950k for metro areas and $600k for regional towns.
MyHome allows Tasmanians to buy with a 2% deposit and the government will pitch in up to $200k or 40% of the value for a new home, or up to $150k or 30% of the value of an existing home. You must however pay the govt back its share within 30 years.
And what about the rest?
While not all states and territories have shared equity schemes, they do have some form of assistance in place.
Queensland- Grants and guarantees
Queensland allows first home buyers to claim a number of different grants and benefits across various programs, including the first home owner grant of up to $15,000, plus stamp duty exemptions. Then there’s the First Home Guarantee Scheme; Family Home Guarantee and Regional Home Guarantee, allowing eligible borrowers to buy with a 5% deposit.
ACT- Home Buyer Concession Scheme
The First Home Owner Grant in the ACT was scrapped in 2019, and replaced with the Home Buyer Concession Scheme. Instead of a cash grant, home buyers can now save up to $35,910 on stamp duty.
All properties in the ACT are eligible, as well as vacant land. There are no conditions around where you buy or for how much, but an income limit of $160,000 applies to be eligible to pay zero stamp duty (saving up to $35,910) on your first home. For each dependent child you have, the income cap is raised.
Northern Territory- First Home Owner Grant
The NT gives you a $10,000 grant to buy or build a brand new home. New homes can include a house, duplex, unit or townhouse, house and land packages and homes purchased off the plan. There is no price limit on how much you pay for your first home to be eligible. Unlike other states, first home buyers are no longer exempt from any stamp duty. Those concessions ended in 2021.