What is shared equity scheme?

Shared equity schemes have a third party (Government or private investor) take an ownership stake in your home in exchange for funding part of the purchase. The federal Help to Buy scheme is the largest Australian example: Government contributes up to 40% of the property price for new builds (30% for existing), reducing your loan size accordingly. You repay the Government's contribution from sale proceeds, plus the same percentage of any capital gain.

The arithmetic on a $700K home with 40% Government contribution: you take a loan for 60% of $700K ($420K), Government holds 40% equity. If you sell years later at $1,000,000, the Government takes 40% of the $1,000,000 ($400,000), and you take 60% of $1,000,000 ($600,000) minus the remaining mortgage. Government effectively earns 40% of the capital gain — same percentage as their original contribution.

Eligibility: income caps ($90,000 single / $120,000 couple under federal Help to Buy), owner-occupier intent, and an income test. Limited annual places nationally. Each state runs its own variant in addition — NSW HomeBuy, VIC Homebuyer Fund, WA Keystart Shared Home Ownership.

shared equity loan · Help to Buy · shared home ownership