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Help to Buy Scheme: What you need to know
With the election looming, the Federal Government has made changes to the eligibility requirements for its ‘Help to Buy’ scheme. So what are the changes?
26 Mar 2025
With the election looming, the Federal Government has made changes to the eligibility requirements for its ‘Help to Buy’ scheme. So what are the changes?
KEY POINTS:
- The Help to Buy scheme will allow eligible home buyers to get a government contribution of up to 40% towards the purchase price of their property.
- Property price and income caps have increased for the Help to Buy scheme.
- The Help to Buy scheme is expected to start in late 2025.
The Help to Buy scheme will allow eligible home buyers to get a government contribution of up to 40% towards the purchase price of their property, while only requiring a 2% deposit from the home buyer themselves.
What is the Help to Buy scheme?
The Labor Government’s Help to Buy scheme is proposed to enable eligible home buyers to enter the property market sooner. It differs from the First Home Guarantee, as it’s a ‘shared equity scheme’. This means you co-buy a property with the government, who receives equity in your home in exchange for their contribution.
How does the Help to Buy scheme work?
The Federal Government’s Help to Buy scheme will contribute up to 40% of the purchase price for new homes and up to 30% of the purchase price for existing homes. The home buyer will then need to qualify for a standard home loan to cover the remaining value of the property.
Under the scheme buyers will need to have saved a minimum deposit of 2%, but they will not be required to pay Lenders Mortgage Insurance (LMI), which can be a significant cost.
Eligible home buyers will not need to pay rent on the portion of the home held by the government. The government’s equity can be paid down over time, or when the property is sold, the government will take back its equity and its share of the capital gain.
If the home buyer’s income exceeds the income threshold for two consecutive years, they may need to repay the government’s contribution—in part or in full. It will ultimately depend on the circumstances and the government’s policy at the time.
What is the eligibility criteria for the Help to Buy scheme?
The Help to Buy scheme was originally only available to Australians with a taxable income of up to $90,000 for individuals, and up to $120,000 for joint applicants and single parents. This has now been increased to $100,000 for individuals and $160,000 for joint applicants and single parents.
Applicants will also need to:
- Be an Australian citizen
- Be at least 18 years of age
- Not be a current homeowner, either in Australia or overseas
- Live in the purchased home as their principal place of residence
- Have saved the minimum 2% deposit of the home price and qualify (and be able to finance) the remainder of the purchase through a standard home loan with a participating lender
- Prove they can pay for all associated up-front costs, such as stamp duty, legal fees and mortgage fees
- Be responsible for ongoing costs associated with the property such as rates, strata and utility bills (e.g. electricity, gas, internet etc.).
The Federal Government says the scheme will run for four years, which will more than likely commence in late 2025. The scheme is proposed to support up to 40,000 home buyers to purchase a home of their own.
The scheme is limited to 10,000 applicants per year and locations will also be capped—meaning the 10,000 places will be spread out across the country in eligible locations.
What properties will be eligible for the Help to Buy scheme in Australia?
The property price caps have also increased for the Help to Buy scheme. For instance, Sydney properties which were capped at $950,000 have increased to a cap of $1.3 million. In Melbourne, properties previously capped at $850,000 have increased to a cap of $950,000 and Brisbane has seen increases from $700,000 to $1 million.
Property price caps by region: Help to Buy scheme
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| Eligible region | Current property price cap |
Proposed property price cap |
|---|---|---|
| ACT | $750,000 | $1,000,000 |
| Christmas Island and Cocos (Keeling) Islands |
$400,000 | N/A (no change) |
| Jervis Bay Territory and Norfolk Island |
$550,000 | N/A (no change) |
| NSW capital city and regional centres |
$950,000 | $1,300,000 |
| NSW rest of state |
$750,000 | $800,000 |
| NT | $600,000 | N/A (no change) |
| QLD capital city and regional centres |
$700,000 | $1,000,000 |
| QLD rest of state |
$550,000 | $700,000 |
| SA capital city |
$600,000 | $900,000 |
| SA rest of state |
$450,000 | $500,000 |
| TAS capital city |
$600,000 | $700,000 |
| TAS rest of state |
$450,000 | $550,000 |
| VIC capital city and regional centre |
$850,000 | $950,000 |
| VIC rest of state |
$650,000 | N/A (no change) |
| WA capital city |
$600,000 | $850,000 |
| WA rest of state |
$450,000 | $600,000 |
Source: Media release (22/03/25) from the Minister for Housing and Homelessness Clare O’Neil and the Minister for Industry and Science Ed Husic. New South Wales capital city and regional centre price cap is set at $1.3 million rather than at the median house price of approximately $1.5 million to ensure purchase prices remain within the borrowing capacity of first-home buyers. Regional centres under the Help to Buy scheme include Newcastle and Lake Macquarie, Illawarra, Central Coast, North Coast of NSW, Geelong, Gold Coast and Sunshine Coast.
How will the Help to Buy scheme compare to what is already available?
The Labor party has said it will keep the current Home Guarantee Scheme, including the First Home Guarantee.
Both the First Home Guarantee and Help to Buy scheme will allow home buyers to purchase a home with a smaller deposit and avoid paying LMI. But there are some big differences between the schemes.
The First Home Guarantee scheme focuses on helping home buyers put together a deposit. Eligible home buyers can purchase a property with a deposit as small as 5% and avoid paying LMI, which is normally required for deposits under 20%. Under the scheme, the government ‘guarantees’ the remaining 15%. This does not come in the form of a cash payment or a deposit for the home loan.
The Help to Buy scheme is designed to help home buyers with both their deposit and their repayments. Eligible home buyers will be able to purchase a property with a deposit of as little as 2% and avoid paying LMI. The government will cover up to 30% or 40% of the property price, meaning eligible home buyers could take out a smaller home loan and have smaller repayments. Home buyers will share ownership of their property with the government, with the option of taking additional equity over time.
There will also be different eligibility criteria. The Help to Buy scheme is aimed at low- and middle-income earners with taxable incomes of up to $100,000 for individuals and $160,000 for joint applicants and single parents, while the First Home Guarantee scheme is available for those earning up to $125,000 for individuals and $200,000 for joint applicants.
Currently, there are some similar shared equity schemes to Help to Buy being offered on a state level.
In Victoria, for example, eligible home buyers can get a contribution of up to 25% towards the purchase of their property. Home buyers need a minimum deposit of 5% and can also avoid paying LMI.
In Western Australia, eligible home buyers can get a contribution of up to 30%, with a deposit as low as 2% and not have to pay LMI. Different terms and conditions apply across these schemes.
When will the Help to Buy scheme begin?
The Help to Buy scheme was first announced as part of Labor’s federal election campaign in 2022, but only passed into legislation on the 27th of November 2024. Many expect the program to begin in late 2025.
If you’re looking at buying a house with finance, you can compare home loans with Canstar. It’s important to read all relevant documentation, such as the Product Disclosure Statement (PDS) and Target Market Determination (TMD), for any loan product you’re considering. Since taking out a home loan is a large financial commitment, it’s also recommended that you get professional financial advice before doing so.
Compare Home Loans (First home buyer with a variable rate) with Canstar
If you’re currently considering a home loan, the comparison table below displays some of the variable rate home loans on our database with links to lenders’ websites that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by comparison rate (lowest-highest). Products shown are principal and interest home loans available for a loan amount of $500,000 in NSW with an LVR of 80% of the property value and that offer an offset account. Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s home loans comparison selector to view a wider range of home loan products. Canstar may earn a fee for referrals.
Owner occupied
20% min deposit
Redraw facility
Owner occupied
10% min deposit
Redraw facility
Owner occupied
20% min deposit
Redraw facility
Owner occupied
20% min deposit
Redraw facility
Cover image source: Drazen Zigic/Shutterstock.com
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
- What is the Help to Buy scheme?
- How does the Help to Buy scheme work?
- What is the eligibility criteria for the Help to Buy scheme?
- What properties will be eligible for the Help to Buy scheme in Australia?
- How will the Help to Buy scheme compare to what is already available?
- When will the Help to Buy scheme begin?
Owner occupied
20% min deposit
Redraw facility
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