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How the government's Help to Buy scheme works

By Niko Iliakis and Jack Dona
Fact Checked
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Prime Minister Anthony Albanese

When the Albanese government first introduced the Help to Buy scheme in May 2022, the start date for the new home buyer scheme seemed impossibly far away. 

But now that 2024 is right around the corner, Labor's plan to help Australians purchase a home is closer than ever to reality. 

But who is eligible for the scheme and how does it work?

How does the Help to Buy scheme work?

  • The government will contribute up to 40% of the cost of a new home (up to 30% for an existing home)
  • For low-income earners making less than $90,000/year or couples earning less than $120,000/year
  • Buy a home with as little as a 2% deposit 

The Help to Buy scheme aims to reduce upfront and ongoing mortgage costs by letting households enter a co-ownership arrangement with the government.

Under the scheme, the government will make an equity contribution of up to 40 per cent on purchases of new homes, and up to 30 per cent on purchases of existing homes. 

While that means the government will own a portion of the property — and can claim its equity and share of any capital gain if the home is sold — homebuyers can purchase an additional stake in the property when they are able to do so.

According to the ALP, the scheme could lead to savings of $380,000 on a new Sydney home, $255,000 on a new Melbourne home, and $195,000 on a new Brisbane home.

It will only be available to individuals who earn up to $90,000 per year and couples with a combined income of up to $120,000 per year. Eligible Australians must also have at least 2 per cent of a property’s value saved up for a deposit.

Up to 10,000 households will be able to access the scheme each financial year, totalling 40,000 by the time the scheme ends.  

Am I eligible for the Help to Buy scheme?

To qualify for the scheme, you’ll need to tick the following boxes:

  • You must be an Australian citizen 
  • You must be at least 18 years of age
  • You must not own any other property or land in Australia or elsewhere
  • Your income must not exceed $90,000 if you are an individual and $120,000 if you are a couple
  • You must intend to use the home as your principal place of residence
  • You must have a deposit of at least 2 per cent of the property’s value
  • You must qualify for the remainder of the purchase price through a home loan with a participating lender.

Are there any price caps?

The price of properties available to purchase under the scheme will vary both across states and territories and within states. Browse the table below to see how much you might be eligible for.

Eligible region Price cap
NSW - Capital city & regional centres $950,000
NSW - rest of state $600,000
VIC - Capital city & regional centres $850,000
VIC - rest of state $550,000
QLD - Capital city & regional centres $650,000
QLD - rest of state $500,000
WA - capital city $550,000
WA - rest of state $400,000
SA - capital city $550,000
SA - rest of state $400,000
TAS - capital city $550,000
TAS - rest of state $400,000
ACT $600,000
NT $550,000

Help to Buy scheme FAQs

What if my income goes up during the loan period?

If you’re enrolled in the Help to Buy scheme and your yearly income exceeds the eligibility threshold for two consecutive years, you will be asked to repay the amount contributed by the Government — either in part or in whole depending on your circumstances.

How will the government pay for the scheme?

To pay for the Help to Buy scheme, along with other policies aimed at addressing housing unaffordability, Labor will double foreign investment screening fees and financial penalties beginning July 2022. This is expected to raise around $445 million in revenue.

Will I have to pay Lenders Mortgage Insurance (LMI)?

No, the scheme will allow homebuyers to skip purchasing Lenders Mortgage Insurance. LMI is typically required on low deposit loans (as they are regarded as riskier) and protect the lender in case a borrower cannot service their mortgage.

Does the scheme cover stamp duty?

No. The Labor Party notes that while the scheme will reduce the size of the deposit and ongoing mortgage repayments, homebuyers will still be required to cover other costs associated with buying a home, such as stamp duty and loan fees.

Is it only available for first home buyers?

The ALP explains that the scheme will be available to those that do not own land or property in Australia or overseas. It does not specify that it is only available to first home buyers.

Will I have to pay rent to the government?

No. Though the government will own a stake of the home, homebuyers will not be required to pay rent on that portion.

Are there any similar schemes in Australia?

Yes. Victoria’s Homebuyer Fund is another shared equity scheme in which the government contributes up to 25 per cent of a property’s value. As with the Help to Buy scheme, homebuyers can buy back the government’s share of the property over time.

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Niko Iliakis
Niko Iliakis
Money writer

Niko has three years experience as a finance journalist. He specialises in home loans, business loans and interest rate movements at Mozo.

Jack Dona
Jack Dona
RG146
Money writer

Jack is degree-qualified in communications and creative writing, with a talent for simplifying financial jargon. His approach helps consumers make better decisions. Jack is RG146 certified in generic knowledge and uses flair to make finance interesting.

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