How does HomeShare Work?
Often there is a gap between what people can afford to pay for home ownership, given what they earn, and what they must pay for housing, given what it costs.
HomeShare can turn the dream of home ownership into a reality by reducing the initial cost of buying a home and the monthly cost of owning it. In fact under HomeShare you may be pay little more for home ownership than you are presently paying for rent.
HomeShare involves initially sharing home ownership with the Director of Housing, representing the Tasmanian Government. By sharing ownership, you may be able to buy a home that previously you could not afford.
The Director’s share must be bought after 30 years. You can do this by buying the Director’s share or by selling the house. The value of Director’s share will be calculated on the market value of the property at that time. This means as you and the Director share any capital appreciation (or capital loss); the value of the Director’s share will most probably be more than the original amount contributed by the Director.
When you buy a home through HomeShare, no rent or interest is charged on the Director’s share. However you must pay rates, insurance and maintain the home.
Buying a Newly Constructed Home
If you buy a newly constructed home on the open market, you and the Director of Housing buy the home together.
You will be required to borrow the maximum loan you can afford to repay.
The amount of the Director’s share will then depend on the purchase price and the size of your loan. However the Director’s share will be capped at 25% of the price up to a maximum of $50,000.
Where the loan amount would require you to take out mortgage insurance the Director would increase the equity share to avoid that cost, up to a maximum $50,000.
For example, you are eligible for the First Home Owner Grant; you have $5000 savings and want to buy a house for $230,000. Based on your income, the maximum loan you can afford is $175,000. Allowing for fees and costs, the Director would contribute $39,000 towards the purchase to buy a 16.9% share in the house. You would buy the other 83.1% share of the house.
About the Loan
- All HomeShare loans are funded by Bendigo Bank;
- Tassie Home Loans Pty Ltd arranges and manages all HomeShare loans;
- A deposit of 5% of the property value is required;
- First Home Owner Grant can be used towards the deposit, fees and debt repayment;
- No savings history required, but you must have the ability to make the repayments;
- Fixed and variable interest rates available;
- Interest calculated daily, charged monthly;
- No lender’s mortgage insurance;
- No monthly loan account fees;
- Redraw facilities available – not during the fixed interest rate period;
- Repayments can be made monthly, fortnightly or weekly;
- Loan term up to 30 years;
- Additional payments accepted;
- Transactional account rebates on all eligible transactions (personal banking) – refer to brochure
from Bendigo and Adelaide Bank Limited.
Are you eligible for HomeShare?
To be eligible for HomeShare you must:
- Satisfy the income and asset limits for the scheme
- Be an Australian citizen or permanent resident, living in Tasmania
- Be a natural person at least 18 years old
- Be able to provide a minimum deposit of $3,000 or 5% of the purchase price, whichever is the greater (the First Home Owner Grant can be used towards the deposit)
- 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 application
- Be free of debt to Housing Tasmania
- Not have received previous assistance under Streets Ahead or HOAP
- Be able to pay legal and establishment fees
- Live in the house as your principal place of residence