The Tasmanian government has revamped its HomeShare shared equity scheme by adjusting the eligibility and scope of the assistance and partnering with local lender Bank of us.
The new version of the scheme will commence on 1 July and will provide a maximum contribution of $200,000 or 40% of the purchase price of a new home or house and land package and $150,000 or around 30% of the price of an existing home.
With the assistance from the state government, eligible applicants will now be only required to pay as little as 2% deposit. They will not be charged with Lenders Mortgage Insurance (LMI).
The current version of the scheme has Bendigo and Adelaide Bank as the main lender. The new program will not impact existing HomeShare applicants who are currently funded by Bendigo and Adelaide Bank — applicants with pre-finance approval and are still waiting to find a house to purchase will still be under Bendigo provided that their purchases settle by 31 December 2022.
How does the improved scheme work?
To ensure that Tasmanian home seekers can break into the market soon, Tasmania’s Director of Housing will shoulder up to 40% of the purchase price at a maximum contribution of $200,000 for new homes.
Homebuyers who wish to purchase an existing home will be able to get guaranteed by the Tasmanian government for 30% of the purchase price at a maximum contribution of $150,000.
With these guarantees, the homebuyer will only need to have as low as 2% mortgage deposit, which will not be subject to LMI.
The previous version of the scheme requires buyers to have at least 5% mortgage deposit.
The government’s contribution or equity, under the current version of the scheme, must be paid before 30 years by either buying the share or selling the house.
What properties can you buy with the scheme?
The new scheme now covers existing homes for sale. However, the amount that the government will cover for the purchase of an existing house will be lower, capped at 30% or $150,000.
The inclusion of existing homes expands the property eligibility stated under the current scheme, which only caters to newly constructed house.
What are the eligibility requirements?
According to Department of Communities Tasmania, HomeShare applicants must meet the following criteria to be eligible:
- Have an income to meet the cost of purchasing and owning a home
- Be an Australian citizen or permanent resident, living in Tasmania
- Be an individual at least 18 years old (not a business or organisation)
- Not own or have an interest in any other real property (land)
- Not be an un-discharged bankrupt or discharged from bankruptcy within three years before the date of the application
- Not owe any money to Housing Tasmania
- not have received help under HomeShare, Streets Ahead or Home Ownership Assistance Program (HOAP) before
- Be able to pay legal and establishment fees
- Be able to live in the house they buy (it has to be the main residence)
Eligible applicants must also meet the gross income limits to qualify for the scheme. Below is the current income schedule being used for the assessment of applications for the current version of the scheme. This table is being reviewed and will likely be amended come 1 July 2022.
|
NO OF ADULTS |
NO OF CHILDREN |
GROSS INCOME LIMIT |
GROSS INCOME LIMIT |
|
2 |
0 |
1 829 |
95 119 |
|
2 |
1 |
2 196 |
114 180 |
|
2 |
2 |
2 562 |
133 242 |
|
2 |
3 |
2 929 |
152 304 |
|
2 |
4 |
3 294 |
171 271 |
|
1 |
0 |
1 591 |
82 712 |
|
1 |
1 |
1 829 |
95 119 |
|
1 |
2 |
1 959 |
101 847 |
|
1 |
3 |
2 323 |
120 814 |
|
1 |
4 |
2 690 |
139 877 |
—
Photo by @sunny0725 on Unsplash
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