Buying your first home can feel like a big mountain to climb. Between saving a deposit, keeping up with rising house prices and getting approved for a home loan, it’s easy to feel like home ownership is still a few years away.
That’s where the Australian Government’s Help to Buy Scheme comes in.
Designed to make buying a home more achievable, the scheme lets eligible buyers purchase with as little as a 2% deposit, while the government contributes up to 40% of the purchase price for a new build or 30% for an existing home.
For many first home buyers, that can mean getting into the market sooner, borrowing less and avoiding the stress of saving a much larger deposit.
Here’s how it all works.
What is the Help to Buy Scheme?
Think of Help to Buy as a helping hand into your own home.
Instead of funding the entire purchase yourself, the Australian Government contributes part of the purchase price, reducing the amount you need to borrow from the bank.
Here’s what that looks like:
- You save a minimum 2% deposit
- Apply through a participating lender
- The government contributes:
- Up to 40% for a new build
- Up to 30% for an existing home
In return, the government owns an equivalent share of your property until you choose to buy it back or sell your home.
You’re still the legal owner, and your name is the one on the title.
How does Help to Buy work?
The biggest advantage is simple, you borrow less.
Because the government contributes towards the purchase price, your home loan is smaller than it would normally be. That can mean:
- Lower monthly repayments
- A better chance of avoiding Lenders Mortgage Insurance (LMI)
- Less time spent saving for a larger deposit
You’ll repay your home loan as normal while the government retains its share of the property.
When you decide to buy back that share, or if you sell your home, the amount is based on the property’s market value at the time. If your home’s value has increased, the government’s share increases too. If it has decreased, its share decreases as well.
Example: Building with Help to Buy
Sarah is a 31-year-old nurse in Adelaide building a new home worth $650,000.
She’s saved $13,000 and has been approved for a $377,000 home loan.
Because she’s building a new home, the Australian Government contributes 40%, helping her bridge the gap.
| Amount | % of property value | |
| Purchase price | $650,000 | 100% |
| Sarah’s deposit | $13,000 | 2% |
| Home loan | $377,000 | 58% |
| Government contribution | $260,000 | 40% |
| Total | $650,000 | 100% |
Because Sarah only borrows 58% of the property’s value, she avoids paying Lenders Mortgage Insurance.
Later, if her home is worth $750,000, buying back the government’s 40% share would cost $300,000, as repayments are based on the property’s current market value.
Who is eligible?
Eligibility comes down to age, deposit, citizenship, income and what you already own. There’s one point worth flagging before the checklist: if you can already afford the home on your own savings and borrowing capacity, you don’t qualify. Help to Buy is built for buyers who are close but short, not a discount for people who don’t need the leg-up.
Help to Buy is designed for buyers who are close to purchasing a home but need a little extra support.
To be eligible, you’ll generally need to:
- Be at least 18 years old
- Be an Australian citizen
- Meet the income limits
- Contribute at least a 2% deposit
- Live in the home as your principal place of residence
- Don’t currently own another property
If you’re already able to purchase the property without government assistance, you won’t be eligible for the scheme.
Income limits
Your taxable income must be no more than:
- $103,000 for individual applicants
- $165,000 for joint applicants and single parents
This is your taxable income before tax, as shown on your ATO Notice of Assessment for the previous financial year. The limits are indexed annually, so it’s worth checking the latest figures before applying. Australian Government Help to Buy fact sheet
Previous homeowners
The scheme isn’t limited to first home buyers.
If you’ve owned property before but don’t currently own a home or land, you may still be eligible. Some exceptions also apply for eligible single parents.
What properties are eligible?
The scheme can be used to purchase:
- Houses
- House and land packages
- Townhouses
- Apartments
- Duplexes
- Vacant land with an eligible building contract
- Knockdown rebuild projects
The property must be your principal place of residence and fall within the price cap for your area.
Property price caps
| State | Capital cities & major regional centres | Rest of state |
| NSW | $1,300,000 | $800,000 |
| VIC | $950,000 | $650,000 |
| QLD | $1,000,000 | $700,000 |
| WA | $850,000 | $600,000 |
| SA | $900,000 | $500,000 |
| TAS | $700,000 | $550,000 |
Always check the latest property price caps before signing a contract.
What are my responsibilities?
Joining the scheme comes with a few ongoing responsibilities.
While you’re participating, you’ll need to:
- Keep the property maintained
- Maintain building insurance
- Continue meeting the scheme eligibility
- Provide updated financial information if requested by Housing Australia
If your circumstances change significantly, Housing Australia may review your eligibility and require you to buy back some or all of the government’s share.
Things to consider
Like any government initiative, Help to Buy has both advantages and trade-offs.
Before applying, it’s important to understand that:
- The government owns a share of your property.
- It also shares in any future increase in value.
- Your eligibility can be reviewed while you’re in the scheme.
- Places are limited to 10,000 each year across Australia.
- Only participating lenders offer the scheme.
- Help to Buy generally can’t be combined with other government shared equity or guarantee programs.
For many buyers, the opportunity to purchase sooner outweighs these trade-offs, but it’s important to understand how shared equity works before committing.
How to apply
One of the biggest misconceptions about Help to Buy is where you apply.
Applications aren’t made directly with Housing Australia. Instead, you’ll need to apply through a Participating Lender.
The process generally looks like this:
- Check your eligibility.
- Speak with a participating lender.
- Submit your application.
- Receive conditional approval.
- Find your home.
- Sign your contract.
- Settle and move in.
You’ll typically need:
- Photo identification
- ATO Notice of Assessment
- Income documents
- Evidence of your deposit
What you’ll need:
- Photo ID
- ATO Notice of Assessment
- Income documents
- Evidence of your deposit
Are there any other assistance programs available?
Help to Buy is just one of the ways eligible buyers can get a little extra support on the path to home ownership. Depending on your circumstances, you may also be able to access the First Home Guarantee (5% Deposit Scheme), the First Home Owner Grant, the First Home Super Saver Scheme, or state-based stamp duty concessions.
If you’re building in WA, check out our guide to WA first home buyer grants and schemes for a full breakdown of the grants, concessions and government support available to help you get into your new home.
Final thoughts
Help to Buy is designed to make home ownership more accessible by reducing what you need to save and borrow. For eligible buyers, it could make building a new home possible sooner.
At La Vida Homes, we know that getting started is often the hardest part. Whether you’re exploring government schemes, comparing finance options or planning your first build, we’re here to help make the journey feel a little simpler.
This article is general information only and isn’t financial or legal advice. Grant amounts, thresholds and eligibility criteria change, always confirm current details with Housing Australia, or a licensed mortgage broker before making decisions based on this content.
