Help to Buy Scheme: Find out what the recently passed bill means for you

  • Written by: The Times

For many Australians, stepping into the property market feels as daunting as climbing Everest—challenging, expensive, and full of obstacles.
The Federal Government’s Help to Buy Scheme, is a game-changer for 40,000 low to middle-income Australians. This shared equity program lets eligible first-home buyers purchase with just a 2% deposit, with the government contributing up to 40% for new homes and 30% for existing properties.
By lowering upfront costs and mortgage repayments, it removes key barriers to homeownership. Paired with Build-to-Rent incentives, this initiative aims to fast-track your path to owning a home.

3 Reasons Why This Scheme Will Get You on the Property Ladder Sooner
1. Significantly Reduced Deposit Requirement:
The Help to Buy Scheme dramatically lowers the entry barrier to homeownership by requiring only a 2% deposit.
  • Less savings stress: You can enter the market with a smaller deposit. For a $500,000 property, you only need $10,000, not the usual $100,000.
  • Faster entry: Reduced upfront costs mean you can enter the market years earlier.

2. Increased Purchasing Power

The government’s contribution (up to 40% for new homes, 30% for existing) stretches your budget, making it easier to secure a better property.
  • More options: A $400,000 budget could extend to properties worth up to $666,000.
  • Better opportunities: Access homes in desirable areas or with features that fit your needs.
Scott Bolton, Aussie Broker, Canberra emphasised the impact, "Having the government as a co-investor helps buyers get into properties they once thought were out of reach.”

3. Lower Ongoing Costs

Borrowing less from the bank means lower mortgage repayments, easing the long-term financial burden.
  • Smaller monthly payments: Reduced loan amounts lead to less strain on your budget.
  • No interest on the government’s share: Keeps more income available for other expenses or savings.
Lachlan Howell, Aussie Broker, Neutral Bay adds, "This scheme is a game-changer for many Australians. Not only does it provide the opportunity to lower your ongoing monthly mortgage repayments, but it also offers the chance to hold a share in a larger asset, providing both short-term and long-term benefits. It's a stepping stone for many to overcome the challenges of entering the property market by significantly minimising their deposit. Aussies can now achieve their homeownership goals today rather than years down the track."

Eligibility Criteria

To qualify for the Help to Buy Scheme, applicants must meet the following conditions:
  • Be Australian citizens aged 18 or over
  • Have an annual income of $90,000 or less for individuals, or $120,000 or less for couples
  • Not currently owning property in Australia or overseas
  • Intend to live in the purchased property
  • Be able to finance the remainder of the purchase through a standard home loan
  • Have saved the minimum 2% deposit and be able to cover associated costs such as stamp duty and legal fees

Property Price Caps

The scheme includes property price caps that vary by location. While the exact caps for the Help to Buy Scheme are yet to be announced, they are expected to be similar to those of the First Home Guarantee:
State/Territory
Capital City and Regional Centres
Rest of State
NSW
$950,000
$750,000
VIC
$850,000
$650,000
QLD
$700,000
$550,000
WA
$600,000
$450,000
SA
$600,000
$450,000
ACT
$750,000
TAS
$600,000
$450,000
NT
$600,000
550,000

The Help to Buy Scheme Summarised

The Help to Buy Scheme is a shared equity program that enables eligible buyers to enter the property market with a smaller deposit and reduced mortgage. Here's how it works:
  1. Government Contribution: The federal government will contribute up to 40% of the purchase price for new homes and 30% for existing properties
  2. Deposit Requirement: Buyers need only a 2% deposit to participate in the scheme
  3. Ownership Structure: The government becomes a co-owner of the property, holding an equity stake proportional to its contribution
  4. No Rent or Interest: Participants don't pay rent or interest on the government's share of the property.
  5. Buying Back Equity: After two years, homeowners can start buying back the government's share in 5% increments.
  6. Equity at Sale: If the property is sold, the government recovers its equity contribution plus a proportional share of any capital gains.

How do I apply for the Help to Buy scheme?

The Help to Buy scheme is yet to be officially legislated, but you can start getting ready to apply as soon as it launches:
  1. Check your eligibility: Ensure you meet the Help to Buy criteria above.
  2. Find the right lender: Talk to a Local Aussie broker to assess your financial situation and explore the options available for your circumstances.
  3. Find the perfect home: Search for a property, keeping in mind the above price caps for each state and territory.
  4. Submit paperwork: Work with your Aussie broker to submit relevant paperwork for your application.