The Shared Equity Home Buyer pilot closed on 30 June 2024.
The NSW Shared Equity Home Buyer Helper was a pilot program to assist eligible single parents (with dependent children), single people (50 years and over), first home buyers who are employed as key workers, and victim-survivors of domestic and family violence with buying a home.
Those that entered the program will continue to be supported by Revenue NSW and must maintain their obligations under the scheme for as long as they own their home.
Further information on ongoing eligibility criteria for participants in the scheme, please refer to Revenue NSW Shared Equity Home Buyer Helper.
Need help? Call Shared Equity Support 1300 679 372.
Renovations, home improvements and valuations
If you want to do renovations or make modifications that will potentially change the value of the property, you’ll need approval from Revenue NSW if the modifications:
- will cost at least $20,000, incurred within a 12- month period, or
- need council approval (including complying development).
Revenue NSW will approve the renovations/modifications if the costs are reasonable, do not represent maintenance or repairs and will add value. If the valuation shows the work will reduce the value of the property, your application won’t be approved.
You’ll need to obtain all consents and authorisations necessary from Revenue NSW for the proposed works and get an independent valuation before work starts via your lending partner. This valuer should also estimate how much the property will be worth once the work is done (excluding the impact of general market movements). Your lending partner can help organise valuations.
The government’s equity interest will be adjusted to take into account the increase in property value after the modification. General market movements between the 2 property valuations and the impact of any repairs, maintenance, or alterations are excluded.
Equity interest post-modification =
Equity interest pre-adjustment x
Property valuation pre-modification
Property valuation post-modification
No adjustment to the government’s equity will be made for unapproved modifications that increase the value of the property.
If unapproved renovations or modifications are carried out and valuations show they have decreased the value of the property, the government’s equity will be adjusted (increased) per the formula below to compensate for your failure to meet the requirements of Shared Equity. You will be responsible for organising a valuation via the lending partner to assess the property price reduction.
Equity interest adjusted =
Equity interest pre-adjustment x
Property valuation without-modification
Property valuation as-modification
Example 1
Sanjit and Susan decide to renovate the kitchen and living area of their home in Albury, which they purchased for $490,000 with Shared Equity. Although building permits or council approval aren’t required, they have been quoted $30,000 to have the work completed so will need to seek approval from Revenue NSW first.
Sanjit and Susan contacted their lending partner to organise an independent valuation before work was started. The work is approved by Revenue NSW as the pre-modification valuation found the renovation was likely to have either a positive or neutral impact on the property’s value. It included an estimation of the post-modification value of their property, which was used to adjust the value of the Government’s equity.
The pre-modification valuation finds that the property is still worth $490,000 and the estimate finds that Sanjit and Susan’s home will appreciate by $40,000 to $530,000 after the modifications. The Government’s equity interest decreases from 30 per cent to 27.7 per cent.
- Property valuation pre-modification $490,000
- Equity interest pre-modification 30%
- Property valuation post-modification $530,000
- Change in property valuation $40,000
- Equity interest post-modification 27.7%
Example 2
Delores owns a townhouse in Campbelltown under Shared Equity. She wants to remove the sunroom from the rear of her property. She received a quote of $11,000 to have the work completed but understands some of the work needs council approval.
As council approval is required, Delores needs approval from Revenue NSW first. Based on the valuation prior to any work commencing, Revenue NSW finds the modifications are likely to decrease the value of the property and doesn’t grant approval, meaning Delores is not able to proceed with her plans.
Property valuations may be needed at certain times throughout your Shared Equity agreement, for example when you purchase a property, make a voluntary payment, decide to sell or, per above, plan to do renovations or modifications.
A full valuation must include:
- a physical inspection of the property
- photos of the property
- examination of property conditions and zoning restrictions
- a report on the valuer’s findings and assessment
- any other details requested by Revenue NSW.
For full valuations that involve construction works under an eligible comprehensive home building contract, the valuation will need to include an assessment of the value of the property as if the work were completed.
You can access up to five subsidised full valuations under Shared Equity. These can only be used for valuations associated with voluntary partial or full repayment of the Government’s equity interest. As with all valuations, these must be organised through your lending partner.
Ongoing eligibility and obligations
In addition to meeting your obligations on the mortgage with your lending partner, you must also meet the ongoing eligibility criteria and obligations to continue to take part in Shared Equity.
Keep in mind that the ongoing eligibility criteria may differ from the entry criteria you had to meet when you applied for Shared Equity.
To stay eligible for Shared Equity, you must not:
- Exceed the relevant income threshold (indexed each financial year).
- Lose or relinquish your citizenship or residency status (you must be an Australian citizen or permanent resident – or your partner must be if you were joint applicants).
- Own any interest in any other land in Australia or overseas, including as a beneficiary under a trust (applies to all participants).
- Stop occupying the property as your principal place of residence (applies to at least one participant).
- Neglect to notify Revenue NSW of any change to your spousal relationship status.
You must notify Revenue NSW within 3 months if any of the circumstances above change, except for your gross income, which is assessed at each periodic review.
To keep being eligible for Shared Equity, you must:
- Continue to cover all costs associated with ownership (such as insurance, utilities, body corporate fees, council rates, duty and other taxes).
- Continue to meet all repayments on the loan from your lending partner.
- Continue to cover the costs of maintaining the property, carrying out repairs and alterations, and fixing any damage or defects.
- Insure the property with an authorised insurer for the full reinstatement or replacement value. You will need to show evidence of a certificate of insurance during your periodic reviews.
- Send plans to do any significant modifications (that cost at least $20,000 incurred within a 12-month period or requiring council approval) to Revenue NSW for approval.
Participant reviews
Periodic reviews will focus on the factors below.
- Income (of all participants in the case of joint ownership): If a participant’s gross income exceeds the threshold in the two consecutive financial years prior to the review, they will be deemed ineligible and may be required to make a payment to acquire all or part of the Government’s equity interest (subject to a capacity to pay assessment at that time, and ongoing).
- Evidence of meeting ongoing obligations: If your circumstances change or you don’t comply with any of the Shared Equity conditions, it may also trigger a review by Revenue NSW.
To remain in Shared Equity, you will need to keep meeting the eligibility requirements and your other obligations. Periodic reviews will be done to check your eligibility. The first review will either be two years after the property settlement, or earlier if you have a change in circumstance. The next review will be two years after the last review, although we may extend the time between reviews to up to 5 years.
If a periodic review finds your income has changed and you are no longer eligible for Shared Equity, Revenue NSW will assess whether you have a reasonable capacity to make a repayment (see below).
If your circumstances change or you don’t comply with any of the Shared Equity conditions, it may also trigger a review by Revenue NSW.
If you become ineligible for Shared Equity, or if a Revenue NSW review deems you ineligible, you will never be forced to sell your property (except in cases of serious breaches of the Policy Guidelines). You may, however, be required to buy out some or all of the Government’s equity interest in your home, but only if an assessment of your new circumstances finds you can afford to do so, or are in a position to refinance your mortgage with a participating lender.
How to exit Shared Equity
You are encouraged to voluntarily pay out the Government’s equity interest in your home and exit Shared Equity if you are able.
Other ways to exit include:
- sale of the property
- refinancing
- a payment required by Revenue NSW following a periodic review.
See below for more information on making voluntary payments, selling your property, and refinancing.
You may buy back some or all of the Government’s equity interest at any time. However, any such voluntary payment must reduce the Government’s equity interest by at least five percentage points – except when the remaining equity interest is less than five percentage points, and the participant is making the final payment to exit Shared Equity.
A current property valuation is needed to calculate the impact a payment will have on the Government’s equity interest. As mentioned previously, you can access up to five subsidised valuations for this purpose.
If a partial voluntary payment is made, the Government’s remaining equity interest is calculated using the formula below.
Equity interest after payment =
Equity interest before payment –
Payment amount
Current property valuation
Example:
Natalia owns a townhouse in Blacktown. The Government’s equity interest is 30% and the loan balance is $650,000. She received an inheritance and wants to make a one-off partial voluntary repayment of $50,000 to pay down some of the Government’s equity interest.
The payment would need to reduce the equity interest by a minimum of 5 percentage points. Natalia uses one of her subsidised, independent full valuations which assesses the property as now being worth $1,000,000.
Natalia uses the above formula above to calculate that $50,000 meets the 5% minimum repayment threshold and that this will reduce the Government’s post-payment equity interest to 25%.
If you decide to sell your home, you firstly need to inform your lending partner, who will arrange a full valuation from an independent valuer. Revenue NSW will use this valuation to ensure that you have properly maintained the property and that no unauthorised modifications have been made. If you have failed to properly maintain the property, or have made unauthorised modifications that reduce its value, this will increase the Government’s equity interest and the amount you need to repay as part of the sale proceeds.
You must then notify Revenue NSW of your intention to sell. You should also tell your conveyancer or solicitor that you are a Shared Equity participant and inform them of the Government’s equity in the property.
Upon the exchange of contracts, notify Revenue NSW of the sale price of the property, and the required payment to buy out the equity interest, can be assessed.
The current property valuation is applied to calculate the value of the Government’s equity whenever the participant is reducing the Government’s equity and is not selling the property. In the event of a sale of the property, the greater of the sales price and the current property valuation is applied to calculate the Government’s final equity interest amount, as per the formula below:
Government equity interest amount =
Government equity interest x
Greater of current property valuation or sales price
Notify your conveyancer or solicitor of the Revenue NSW assessment and of any outstanding mortgage before the distribution of funds at settlement.
You are responsible for your own legal costs and you must pay all other costs, including the valuation, real estate costs and the agency commission, and the fee for exiting the mortgage early.
The proceeds from the sale will need to be paid out in the order below.
- Lending partner – the outstanding home loan amount.
- Revenue NSW – the Government’s equity interest at the time of the sale.
- Any other parties with a legal or equitable claim to the property.
You will receive the remaining balance.
Example
John notifies the relevant parties of his plan to sell the house he bought in Newtown with Shared Equity. He initially purchased the property for $600,000 with an equity contribution from the Government of $150,000 (25 per cent) and a 2 per cent deposit of $12,000. The original loan was $438,000.
After a number of years, John is interested in selling the property. An independent valuer estimates the property is now worth $750,000 and John is able to sell for this amount. The remaining loan balance is now $338,000.
Once the house is sold, the order of payout will be as follows:
- to the financier for the loan balance
- to Revenue NSW for the Government’s (25 per cent) equity interest.
The various fees will be paid next from the remaining $224,500 – to the valuer, real estate agent and a further fee to the financier to discharge the Shared Equity mortgage on exit. Whatever is left goes directly to John (assuming there are no other legal or equitable claims on the property).
Work with your lending partner if you feel you are in a position to re-finance and acquire, in full or in part, the Government’s equity interest.
Though you can refinance from a lender that is not associated with Shared Equity, you should note:
- with an approved Shared Equity lending partner means you can buy out the Government’s equity interest in full or in part, subject to the minimum 5 percentage point reduction
- with a different lender, means you must buy out the Government’s equity in full.
Refinancing is subject to approval from the financier managing the re-financing and Revenue NSW.
You must pay for any re-financing costs, including the cost to discharge the Shared Equity mortgage if you buy out the Government’s equity interest.
Example
Casey owns a property in Colebee with a loan balance of $555,000. The Government’s equity interest is 30 per cent. Casey decides to refinance her loan and wants to potentially buy out some of the equity interest. She receives approval from Revenue NSW and her lending partner, which is willing to allow Casey to refinance through another lending partner for up to $600,000.
After refinancing the loan balance, Casey wants to know if the remaining $45,000 can be used to partly reduce the Government’s equity interest. Since this is a voluntary repayment, she can use one of her subsidised independent full valuations of the property. The valuation comes back at $1,000,000.
She applies the formula to check whether the equity interest would be reduced by a minimum five percentage points. The $45,000 would reduce it by 4.5 per cent, which doesn’t meet the minimum requirement. Casey won’t be able to make a voluntary repayment of $45,000, so decides to refinance another time.
Glossary
The asset limits are based on the property purchase price and vary depending on your age, gross income and if you’ll be making a single or joint application. To be eligible, your financial assets must not exceed the asset limits that apply to you.
30% of the property purchase price applies to:
- applicants with a combined gross annual income more than $93,200.
45% of the property purchase price applies to:
- applicants aged 18 to 49
- applicants with a combined gross annual income up to $93,200.
65% of the property purchase price applies to:
- single applicants aged over 50
- victim-survivors of domestic and family violence.
The lender will confirm your assets as part of the application process. They may also determine you are eligible for a standard home loan which means the Shared Equity Home Buyer Helper is no longer required. Also see Excess savings, below.
A child is considered a dependent person if they are:
- aged under 16, or
- aged 16 to 18 (under 19) and in full-time secondary study, or
- aged 18 to 21 (under 22) and in receipt of a disability support pension under the Social Security Act 1991.
Revenue NSW may waive the requirement for a child aged 16 to 18 to be in full-time secondary study.
These include the following items of value, whether they are in Australia or overseas:
- currency and deposits (cash, savings, gold etc)
- securities and related assets (shares, bonds, investments etc)
- loans and placements
- superannuation amounts that may be withdrawn from a superannuation fund at the discretion of the member without satisfying early access provisions
- net fixed assets of a business (which excludes trading stock and intangibles)
- luxury items
- any other financial assets Revenue NSW considers to be relevant for determining eligibility.
Normal household assets are excluded unless they are luxury items.
The amendment to the Shared Equity policy guidelines regarding domestic and family violence is reproduced below. See point (d) for the detailed definition of the authorised (competent) persons who can complete an evidence form for victim-survivors of domestic and family violence.
For the purpose of participating in the Shared Equity Scheme, a person is a domestic and family violence victim-survivor if the person can demonstrate they are one of the following:
- a complainant of a domestic violence offence, defined in section 11 of the Crimes (Domestic and Personal Violence) Act 2007 (CDPVA), where the offence resulted in a criminal conviction being imposed or a finding of guilt within the past five years
- a protected person in a current Final Apprehended Domestic Violence Order or in a Final Apprehended Domestic Violence Order that has expired within the past five years, where:
- (i) a ‘protected person’ has the same meaning as section 3 of the CDPVA as the person for whose protection an Apprehended Domestic Violence order is sought or made, and
- (ii) a ‘Final Apprehended Domestic Violence Order’ is a Final Apprehended Domestic Violence Order made by a court under Part 4 of the CDPVA or a final interstate or registered foreign Domestic Violence Order under Part 13B of the CDPVA.
- a person named in an injunction under the Family Law Act 1975 (Cth), made within the past five years, for their personal protection, or
- a person who was a victim-survivor of a domestic and family violence incident that occurred within the last five years, as identified by way of a declaration supported by two of the following authorised (competent)persons in a prescribed form issued by the Chief Commissioner:
- (i) a registered health practitioner, as defined in section 5 of the Health Practitioner Regulation National Law (NSW), who holds general or specialist registration under that Law,
- (ii) a person registered as a social worker (a member of the Australian Association of Social Workers),
- (iii) an employee of a NSW Government agency that provides services relating to child welfare,
- (iv) an employee of a non-government agency that receives government funding to provide services relating to:
- 1. domestic violence or sexual assault, or
- 2. refuge or emergency accommodation, or
- (v) a professional counsellor approved by the Commissioner of Victims Rights under section 31 of the Victims Rights and Support Act 2013 to provide approved counselling services under that Act.
Applicants can ask for the 5-year limit to be extended if they have legal documentation outlined in (a), (b) or (c) dated beyond the timeframe from five to ten years.
If you have financial assets over $100,000, you will be deemed to have excess savings. You may be required to contribute some or all your excess savings (i.e. funds over $100,000) at settlement, adjusted for the funds you have already contributed via your deposit. Such a requirement is at the discretion of Revenue NSW, and will be based on what is deemed reasonable, taking into account your intended use of the excess savings. You will be informed prior to settlement if you are required to contribute an amount from your excess savings.
The home you purchase must be your principal place of residence and you must move in at settlement unless the property is subject to a lease entered into by the previous owner, in which case you must move in within 12 months. If you are building a new home, you have up to 24 months to move in.
If you are applying because your occupation makes you eligible as a key worker, you will be asked to confirm your qualifications and the relevant award or enterprise agreement you work under to make sure you qualify. You can be employed on a temporary, permanent, full-time or part-time basis.
Relevant qualifications and awards or enterprise agreements are listed below.
Early childcare educators
You must hold or be studying towards a Certificate III or Diploma in Children’s services or Early Childhood Education and Care and be employed under the Children’s Services Award 2010 or any other award or enterprise agreement approved by Revenue NSW.
Nurses and midwives
You must be a registered or provisionally registered nurse and/or midwife, an assistant in nursing, or an enrolled nurse employed under any of the following:
- Public Health System Nurses and Midwives (State) Award 2021
- Nurses Award 2020
- Private Hospital Industry Nurses (multiple agreements)
- aged care (multiple agreements)
- miscellaneous industrial agreements (multiple) including affiliated health organisations medical centres and GP services, private sector day procedure services and private sector specialist services
- any other award or enterprise agreement approved by Revenue NSW.
Paramedics
You must be registered with the Australian Health Practitioner Regulation Agency and be employed under any of the following:
- Paramedics and Control Centre Officers (State) Award 2021
- Ambulance and Patient Transport Industry Award 2020, or
- any other award or enterprise agreement approved by Revenue NSW.
Police officers
You must be employed under the Crown Employees (Police Officers Award) 2017 or any other award or enterprise agreement approved by Revenue NSW.
Teachers
Teachers (up to year 12) must be accredited with the NSW Education Standards Authority to teach school students up to Year 12 and be employed under any of the following:
- Crown Employees (Teachers in Schools and Related Employees) Salaries and Conditions Award 2020
- Independent Schools (Teachers) Agreement 2017
- Independent Christian Schools Agreement 2021
- NSW and ACT Catholic Systemic Schools Enterprise Agreement 2020
- Educational Services (Teachers) Award 2020
- various Early Childhood Teacher private enterprise agreements, or
- any other award or enterprise agreement approved by Revenue NSW.
Your lending partner is the financial services provider behind your home loan.