Housing minister Julie Collins (L) witth prime minister Anthony Albanese
The maximum income for a single participant in the Commonwealth’s new shared equity scheme will be $90,000, draft Program Directions for the Help to Buy scheme show.
The Program Directions contain details of the scheme, including the scheme’s eligibility criteria and obligations on participants.
The joint income threshold for a financial year is $120,000.
The cap on a single income of $90,000 is 1.3 times the latest estimate of mean incomes by the Australian Bureau of Statistics.
Under the program, Housing Australia will administer the scheme, providing eligible participants with a Commonwealth equity contribution of up to 30 per cent of the purchase price of an existing home and 40 per cent of a new home.
Homebuyers will need a minimum 2 per cent deposit to participate and will qualify for a standard home loan (with no lenders mortgage insurance). The equity contribution means that borrowers’ monthly repayments will be lower.
The directions also set out the maximum values for properties. This value ranges from $450,000 in Tasmania (other than Hobart) to $950,000 in New South Wales (which will cover the entire states, with no carve out between Sydney and regional centres).
The Commonwealth plans to allocate funding for up to 10,000 participants in the scheme, and demand is certain to outrun this.
Establishing a national shared equity scheme fulfils a political promise of the Albanese government prior to the 2022 election.
Help to Buy will sit alongside a range of state government and private sector shared equity schemes.