Buying a home has become increasingly challenging for many Australians, particularly first home buyers trying to save a deposit while managing rising living costs.
The Help to Buy Scheme is a shared equity initiative designed to make home ownership more accessible by reducing the amount you need to borrow. Understanding how it works and whether you may be eligible can help you decide if it is the right option for your situation.
So, What Is the Help to Buy Scheme?
The Help to Buy Scheme is an Australian Government shared equity program administered by Housing Australia.
Under this scheme, the government contributes a portion of the purchase price of a home, meaning you borrow less from a lender and may be able to enter the property market sooner.
In return, the government holds an equity share in the property.
The government contribution can be:
- Up to 40 percent for a new home
- Up to 30 percent for an existing home
You do not pay rent or interest on the government’s share.
How the Help to Buy Scheme Works
Here is a simple breakdown of how the scheme works in practice.
- You contribute a minimum deposit, which can be as low as 2 percent
- The government contributes an equity share
- You take out a home loan for the remaining portion
- You live in the property as the owner occupier
- Over time, you can choose to buy out the government’s share
When the property is sold, the government receives the same percentage share of the sale price as their original contribution.
Who Is Eligible for the Help to Buy Scheme?
Eligibility is assessed based on income, property value and personal circumstances.
Income limits
At the time of writing, income thresholds are:
- Singles earning up to $90,000 per year
- Couples earning up to $120,000 per year
Income is assessed using your most recent taxable income.
Buyer eligibility
To be eligible, you must:
- Be an Australian citizen
- Be at least 18 years old
- Not currently own or have previously owned property in Australia
- Live in the property as your principal place of residence
In some circumstances, people who have previously owned property may be eligible, such as following a relationship breakdown, but this is assessed on a case by case basis.
Property price caps
The scheme includes property price caps that vary by state and region. These caps are designed to reflect local market conditions and must be met to qualify.
What Types of Properties Are Eligible?
Eligible properties generally include:
- New homes
- Existing homes
- Off the plan purchases, subject to conditions
Investment properties are not eligible. The property must be owner occupied.
Benefits of the Help to Buy Scheme
For eligible buyers, the scheme can offer several advantages.
- Smaller loan size and potentially lower repayments
- Reduced deposit requirements
- Greater access to the property market
- No interest or rent payable on the government’s share
These benefits can make home ownership more achievable for buyers who would otherwise struggle to meet traditional lending requirements.
Things to Consider Before Applying
While the scheme can be helpful, it is important to understand the long term implications.
- The government shares in future capital growth
- You may need lender approval to buy out the government’s share
- Ongoing eligibility and property requirements apply
- Places in the scheme are limited
Understanding how shared equity works is essential before deciding whether this option aligns with your goals.
How a Mortgage Broker Can Help
Shared equity schemes add an extra layer of complexity to the home buying process.
A mortgage broker can:
- Confirm whether you may be eligible
- Explain how the scheme works alongside a home loan
- Compare lenders that participate in the scheme
- Guide you through the application and approval process
Clear guidance helps ensure you choose an option that suits both your short term needs and long term plans.
Helpful Australian Resources
For accurate and up to date information, the following Australian websites are useful references:
- Housing Australia for official Help to Buy Scheme details
https://www.housingaustralia.gov.au - MoneySmart by ASIC for shared equity and home loan education
https://moneysmart.gov.au - Services Australia for broader government support information
https://www.servicesaustralia.gov.au - State revenue office websites for property price caps and stamp duty
Example for Queensland: https://www.qld.gov.au
Is the Help to Buy Scheme Right for You?
The Help to Buy Scheme can be a powerful option for eligible buyers, but it’s not the right solution for everyone.
Understanding how it works, what you qualify for and how it fits into your broader financial picture is key.
If you would like clear, personalised guidance on whether the Help to Buy Scheme could work for you, a simple conversation can help you understand your options and decide your next step with confidence.
Ready to talk things through?
If you’d like clear guidance tailored to your situation, I’d love to hear from you.