Shared Equity Scheme guide for NSW
The Shared Equity Scheme, also known as the Help to Buy Scheme, is a newly revamped initiative designed to assist Australians in purchasing a home with reduced upfront costs. This government-backed scheme launching in 2026 will offer financial support to 40,000 eligible households, helping first home buyers get onto the property ladder by contributing a percentage of the home's equity. The Federal Government's contribution will be up to 40% for new homes and 30% for existing homes, providing a smaller deposit requirement and helping reduce mortgage repayments.
Quick overview: the Shared Equity Scheme lets eligible homebuyers purchase with just a 2% deposit, with the government contributing up to 40% equity on new homes and 30% on existing homes. This reduces loan size, eliminates LMI costs, and lowers monthly repayments, launching in 2026 with 40,000 available places nationwide.
How does the Shared Equity Scheme work?
Understanding the mechanics: understanding the scheme mechanics helps you see how government equity contributions reduce your loan burden and accelerate your path to homeownership. The Shared Equity Scheme works by allowing homebuyers to purchase a property with a smaller deposit of just 2%. The government will provide an equity contribution, which reduces the total loan size and, in turn, the monthly repayments.
Government equity contributions work alongside your deposit to reduce the total mortgage repayments you need to make each month, making homeownership more affordable from day one.
Key components of the scheme
- Government contribution: up to 30% for existing homes and up to 40% for new homes. This equity stake reduces the amount you need to borrow from lenders. Understanding your Loan to Value Ratio (LVR) helps you plan how much you can borrow.
- Eligibility: homebuyers must meet certain income criteria and not currently own other properties. Understanding your budget and eligibility is the first step in the process. A mortgage broker consultation can help clarify your position.
- No rent: there is no rent charged on the portion of the home owned by the government. This differs from traditional rental schemes and makes the arrangement more affordable than alternative shared equity products.
- Repayment: over time, the government's equity stake can be bought back, or repaid when the home is sold. This flexibility allows you to gradually increase your ownership as your financial circumstances improve.
Eligibility criteria for the Shared Equity Scheme
Meeting requirements: meeting eligibility requirements ensures you can access this transformative first home buyer support and plan your property purchase effectively. Eligibility focuses on first-time homebuyers with limited savings. The scheme targets those who need assistance entering the property market and have demonstrated commitment through deposit savings.
To qualify for the scheme, potential homebuyers must meet the following criteria:
- Australian citizen or permanent resident: aged 18 years or older
- Income requirements: earn $100,000 or less for a single applicant, or $160,000 or less for a couple. This income threshold targets those who need assistance entering the property market.
- Principal place of residence: must live in the property being purchased. The property is your principal place of residence, not an investment property.
- No existing property ownership: have no existing property ownership, whether in Australia or overseas. This ensures the scheme benefits first-time buyers exclusively.
- Minimum deposit: must have saved a minimum 2% deposit. Your property deposit calculator can help you determine the exact amount needed based on your target property price.
- Upfront costs: must be able to cover other upfront costs like stamp duty, legal fees, and bank charges. Planning these costs with a mortgage broker is essential.
Property price caps by region
Regional caps: understanding regional property price caps ensures your target property qualifies for scheme support and government equity contribution. Property price caps vary by region to ensure scheme support reaches diverse markets. Check your local area's cap to confirm your target property qualifies for the Shared Equity Scheme.
The scheme has property price limits depending on the location:
- NSW – Capital city and regional centres: $1,300,000. This covers Sydney, Newcastle, Wollongong and surrounding established regions, making the scheme accessible across metropolitan and regional NSW.
- NSW – Other areas: $800,000. Regional and rural areas have lower price caps to distribute support across the state and support first home buyers in diverse communities.
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Discover whether the Shared Equity Scheme is right for your situation and how it compares to other first home buyer pathways available in 2026.
Key benefits of the Shared Equity Scheme
Compelling advantages: multiple financial and practical benefits combine to make the Shared Equity Scheme a compelling option for eligible first home buyers entering the market. As a first-time homebuyer, understanding these advantages helps you plan your property purchase strategy.
The Shared Equity Scheme removes traditional barriers to homeownership, including large deposit requirements, Lenders Mortgage Insurance costs, and unaffordable monthly repayments.
Lower deposit requirements
Homebuyers can enter the property market with just a 2% deposit instead of the traditional 10% to 20% requirement. This dramatically reduces the barrier to homeownership and allows first home buyers to purchase sooner rather than waiting years to save a large deposit.
Smaller home loan and repayments
With the government contributing to the equity, the home loan amount is reduced significantly. For instance, purchasing a new home in Sydney valued at $950,000 could save up to $380,000 over the life of the loan, making monthly repayments considerably more manageable. Our mortgage repayment calculator helps you see exact savings for your situation.
No Lenders Mortgage Insurance (LMI) costs
Even though you're contributing less than 20% as a deposit, LMI is not required. This eliminates a substantial upfront cost that typically ranges from thousands to tens of thousands of dollars, letting you invest more of your savings into the property itself.
No rent charged on the government's portion
This reduces the overall financial burden and distinguishes the scheme from traditional shared equity arrangements where rent is charged on the co-owner's share. You build equity without paying additional rent, making the arrangement genuinely affordable.
Can you increase your share in the property?
Building ownership: gradually increasing your equity stake through voluntary payments empowers you to own more of your home whilst building wealth over time. Staircasing lets you increase your ownership incrementally. As you build wealth and earn more, you can buy back portions of the government's equity, eventually owning the property outright without selling.
Yes, you can increase your equity share over time. The minimum increase is 5% of the government's share. This process is known as "staircasing" and it allows you to gradually buy back the government's equity interest in the property. As your financial circumstances improve, you have the flexibility to accelerate this process. Understanding your home equity position helps you plan these strategic purchases and build ownership.
Ongoing obligations under the scheme
Maintaining compliance: maintaining your scheme eligibility requires understanding and meeting ongoing obligations to the government and your lender throughout your ownership. Meeting ongoing obligations protects your ownership and the government's investment in your property. Understanding these requirements helps you plan responsibly as a first home owner.
Homebuyers must ensure they meet several ongoing obligations to remain compliant with the scheme:
- Report changes of circumstances: for example, if you cease to be an Australian citizen or acquire another property, you must inform Revenue NSW within 3 months.
- Home insurance: you must maintain comprehensive insurance coverage on the property to protect both your investment and the government's equity stake.
- Property maintenance: you are responsible for maintaining the property and carrying out necessary repairs to preserve its value and meet scheme requirements.
- Renovations: significant renovations, costing over $20,000 or requiring council approval, need prior government approval to ensure value preservation.
Get expert guidance today
Our mortgage brokers understand the Shared Equity Scheme and can help you plan your entry into the property market when the scheme launches in 2026. We guide first home buyers across Gladesville, Penrith, and throughout NSW through every step of the process.
Exiting the Shared Equity Scheme
Exit pathways: multiple exit pathways provide flexibility as your circumstances and financial position change over time. Plan your exit strategy early. Whether through voluntary payments, property sale, or refinancing, you have flexibility to own your property completely.
There are several ways to exit the scheme when you're ready to own your home outright:
Voluntary payments
You can buy back the government's share over time through regular or lump-sum payments, progressively increasing your ownership stake. This approach works well if your income grows and you want to accelerate ownership.
Sale of the property
The equity contribution must be repaid when the property is sold from the sale proceeds. If your property appreciates, the proceeds after repaying the government's share are yours to keep.
Refinancing
You may exit by refinancing your home loan once you've built sufficient equity to qualify independently with a traditional lender. This is often the most flexible exit option.
Frequently asked questions
Common questions: these FAQs address the most common questions about the Shared Equity Scheme, eligibility, and how it operates in practice. Our mortgage broker team regularly guides first home buyers through these important considerations.
What is the Shared Equity Scheme?
The Shared Equity Scheme is a shared equity initiative introduced by the Australian government to help eligible homebuyers purchase a home with a reduced deposit. The government will contribute up to 40% of the purchase price for new homes and up to 30% for existing homes, allowing buyers to enter the market with just a 2% deposit. The scheme launches in 2026 with support for 40,000 eligible households. This is a transformative first home buyer pathway designed to make homeownership accessible.
How much deposit do I need for the Shared Equity Scheme?
To be eligible for the Shared Equity Scheme, you need to provide a minimum deposit of 2% of the property's purchase price. The government's equity contribution will make up the difference, reducing the size of your home loan and monthly repayments significantly compared to traditional financing. Use our property deposit calculator to see how much you need to save.
What are the income limits for the Shared Equity Scheme?
For eligibility, your annual income must be $100,000 or less for a single applicant, or $160,000 or less for a couple. This ensures the scheme targets those who need assistance entering the property market and helps prioritise support for eligible households across regions like Gladesville, Penrith, and other NSW areas.
Do I have to pay rent on the government's share of the property?
No, you do not need to pay rent on the portion of the property owned by the government. However, you will eventually need to buy back the government's share, either over time through voluntary payments or when the property is sold. This no-rent feature makes the scheme more affordable than traditional co-ownership arrangements.
Can I increase my share in the property?
Yes, you can increase your share in the property by making voluntary payments. The minimum increase is 5% of the government's equity, allowing you to gradually own a larger share of the home through a process called "staircasing." This flexibility lets you accelerate your path to full ownership as your financial situation improves.
What happens if my income exceeds the eligibility limit?
If your income exceeds the limit for two consecutive years, you may be required to repay the government's equity contribution. However, there is currently no indication that you would be required to sell the property, and this will depend on individual circumstances. Planning your long-term financial strategy helps you prepare for this scenario.
What happens if I want to sell my home?
If you decide to sell the property, you must repay the government's equity contribution from the proceeds of the sale. Alternatively, you can buy out the government's share through a voluntary payment or by refinancing before you sell. Our mortgage brokers can help you understand your options before listing.
Are there any property price caps for the Shared Equity Scheme?
Yes, there are price caps depending on the area. In New South Wales, capital city and regional centres have a cap of $1,300,000, whilst other areas have a cap of $800,000. These caps ensure the scheme targets homes within reasonable price ranges for first-time buyers and supports homeownership across diverse regions.
Can I buy any property with the Shared Equity Scheme?
No, the property must meet specific criteria, including being either a new or existing home. The home must also be your principal place of residence and cannot be used as an investment property. This ensures scheme support directly enables owner-occupiers to access homeownership. Learn more about choosing the right property.
What happens if I want to renovate the property?
Significant renovations valued over $20,000 or requiring council approval need to be approved by the government. A valuation must be conducted before and after the renovations to ensure the modifications increase or maintain the property's value. This protects the government's equity stake and ensures quality improvements to the home.
Take the next step
Start your journey to homeownership today. Our experienced mortgage brokers will help you understand the Shared Equity Scheme and guide you towards the best first home buyer pathway for your circumstances.
📧 Email: hello@buyvest.com.au
Related resources for first home buyers
Explore these related articles:
- First Home Super Saver Scheme guide – use superannuation to grow deposit faster with tax advantages
- NSW First Home Owner Grant guide – access $10,000 government grant for new homes
- First home buyer deposit options – explore guarantor support, government schemes, and LMI
- Settlement day guide – prepare, inspect, and finalise your home purchase
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