Labor’s Help to Buy Scheme: What You Need to Know

The Australian government is rolling out a new initiative aimed at helping eligible home buyers enter the property market sooner. Known as the Help to Buy Scheme, this program follows in the footsteps of similar state-run initiatives like Victoria’s HomeBuyer Fund and Western Australia’s HomeShare Scheme.

But what exactly does this mean for you? Let’s break it down.

What Is the Help to Buy Scheme?

The Help to Buy Scheme is a shared equity scheme—meaning the government will contribute up to 40% of the purchase price of a new home (or up to 30% for an existing home) in exchange for a proportional share in the property. This allows eligible buyers to purchase a home with a much smaller deposit, reducing their mortgage size and monthly repayments.

Unlike traditional home loans, buyers won’t be required to pay rent on the government’s share of the property. However, over time, they’ll need to repay the government’s contribution—either gradually or in full when they sell the property.

The scheme was announced during the 2022 federal election campaign but has yet to commence. When it does, there will be 10,000 places available per year for eligible buyers.

How Does It Work?

To qualify, buyers need a minimum deposit of just 2% of the property’s value. The remaining amount is financed through a home loan with a participating lender, while the government’s equity contribution covers up to 40% (for new homes) or 30% (for existing homes).

This means:

✅ Lower deposit requirements

✅ Smaller mortgage repayments

✅ No lenders mortgage insurance (LMI)

Who Is Eligible?

To apply for the scheme, buyers must meet the following criteria:

✔ Be an Australian citizen aged 18 or older

✔ Earn $90,000 or less per year (individuals) or $120,000 or less (couples)

✔ Intend to live in the home as their primary residence

✔ Not currently own any land or property in Australia or overseas

✔ Have saved at least 2% of the property’s value as a deposit

✔ Be able to cover upfront costs (e.g., stamp duty, legal fees, and bank fees) and ongoing expenses (e.g., council rates, strata fees, and utilities)

Property Price Caps

Although official price caps for the Help to Buy Scheme are yet to be announced, we can look at the First Home Guarantee program for reference. Here’s a breakdown of price caps by state:

State	Capital City & Regional Centres	Rest of State
NSW	$950,000	$600,000
VIC	$850,000	$550,000
QLD	$650,000	$500,000
WA	$550,000	$400,000
SA	$550,000	$400,000
TAS	$550,000	$400,000
ACT	$600,000	$600,000
NT	$550,000	$550,000

These figures provide a rough idea of the potential price limits under the Help to Buy Scheme.

Final Thoughts

The Help to Buy Scheme is designed to make homeownership more accessible, especially for first-time buyers struggling with rising property prices. With a low deposit requirement and government support, this initiative could be a game-changer for many Australians.

However, there are still details yet to be confirmed, including exact property price caps and how repayments will be structured. If you're considering this scheme, it’s essential to stay updated and speak with a mortgage broker to understand how it may benefit you.

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