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Buying a home in NSW with as little as 2% deposit

Date: 1 February 2023

The NSW Shared Equity Scheme starts on 23 January 2022 and aims to make home ownership more achievable for single parents, older singles (50+) and key workers. If home buyers are eligible, the NSW Government will buy an ownership share in the property of up to 40% for new properties and up to 30% for existing properties. The home buyer will need to pay as little as a 2% deposit and pay for additional purchase costs such as conveyancing fees, pest and building inspections, and any stamp duty.

There will be 3,000 places available in the 2022/2023 income year and a further 3,000 places available in the 2023/2024 income year. To be eligible, home buyers need to have gross income of $90,000 or less for singles or $120,000 or less for couples and fall into one of the following categories:

  • single parents with at least one child under 18 years of age;
  • single persons 50 years of age or over; and
  • first home buyer key workers, being nurses, midwives, paramedics, teachers, early childhood educators or police officers.

The Scheme is available where the home buyer will live in the property and where the purchase price is below $950,000 for properties in Sydney and major regional centres or below $600,000 elsewhere in NSW.

Whilst home buyers continue to meet the ongoing eligibility criteria for the scheme, they will not need to make repayments of the Government’s contribution, nor pay rent or interest on the part owned by the Government. Once they no longer meet the ongoing eligibility criteria, they will need to start making repayments to effectively purchase back equity from the Government. It is also possible to make voluntary payments to progress towards full ownership of the property.

Example: First home buyer teacher in Tamworth

For an eligible first home buyer who is a teacher in Tamworth buying an existing home at the maximum price of $600,000, the 30 per cent equity contribution would be a maximum saving of $180,000. The equity contribution would lower monthly mortgage repayments by around $860 (assuming an interest rate of 4 per cent over a 30-year term).

More information can be found on the NSW Government website or you can speak with a member of our Tax + Legal team.

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To discuss this with our Tax + Legal team, start by emailing us at enquiries@rm.net.au

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