So what pre-election policy carrots did our new Labor government dangle in front of aspiring home owners?
One key initiative is the ‘Help to Buy’ shared equity program. Shared what, you say?
In a shared equity deal you actually buy your house with the government. The government will pay up to 40 per cent of the purchase price for a new home and up to 30 per cent for an existing home. Eligible buyers – not just first timers – would pay a minimum 2 per cent deposit, reports the ALP on its website.
Eligible buyers would need to earn $90,000 or less per annum for individuals, or $120,000 or less per annum for couples, and they must plan to live in the home.
The big upsides for buyers include a smaller deposit, a smaller home loan and smaller loan repayments. That’s a good thing in an environment where interest rates are starting to move up.
So what’s the catch?
Since the government has paid for part of your home, they would own part of it.
Is that a problem? Not necessarily. Buyers can choose to buy out the government stake over time as their financial circumstances allowed. And you still live in your home and pay normal fees likes rates and strata bills as if you owned it outright.
But we’re interested to see how this bit works out for buyers whose income exceeds the thresholds over time:
“If the homebuyer’s income exceeds the Help to Buy annual income threshold for two consecutive years, they will be required to repay the Government’s financial contribution in part or whole as their circumstances permit,” their website says.
Watch this space!
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Not ready yet? Check our listings for rent.
