First home buyer but struggling to buy on your own?

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Are you a first home buyer wanting to enter the property market, however are not able to purchase or finance a property on your own?

It is commonly assumed that when a first home buyer purchases property with a non-first home buyer, that they automatically “give up” the first home buyer incentive of an exemption or concession from stamp duty under the First Home Buyers Assistance Scheme.

 

However, this is not always the case. The First Home Buyers Assistance Scheme provides for Shared Equity Arrangements, which specifically allows eligible first home buyers to purchase with a non-first home buyer and still receive an exemption or concession on the portion of stamp duty due on their share of the property.

 

Sharing equity is a way to share the cost of buying property with another party, who is referred to as an equity partner. Accordingly, Shared Equity Arrangements are designed to assist first home buyers enter the property market even if they are unable to purchase a home on their own. For example, a first home buyer may purchase with their parent or a sibling as an equity partner in order to be able to obtain sufficient finance.

 

To be able to utilise Shared Equity Arrangements, the first home buyer must purchase at least 50% of the property and meet all other eligibility requirements. The First Home Buyer Assistance Scheme will then be applied to the first home buyer’s share of the property.

 

The balance of stamp duty payable is calculated on the portion of the property to be owned by the non-first home buyer. If the non-first home buyer will own less than 5% of the property, then their portion will be disregarded and the first home buyer’s exemption or concession will be calculated as if they were purchasing the property on their own. 

 

It is important to note however that a first home buyer is not able to utilise Shared Equity Arrangements with their spouse, or even with another non-first home buyer should their spouse have previously owned residential property in Australia.

 

If you are a first home buyer wishing to purchase a property with a non-first home buyer, please contact us and we can assist you in determining whether you are eligible for Shared Equity Arrangements and guide you through your first property purchase.

 

For further information contact:

Natali Vujica
Licensed Conveyancer and JP
natali@couttslegal.com.au
02 4607 2108