Help to Buy Scheme 2026: Government Pays Up to 40% of Your Home — Full Guide
The Help to Buy shared equity scheme lets the government buy up to 40% of a new home or 30% of an existing home with you. Here's how it works, eligibility criteria, property price caps, and how to apply.
What is the Help to Buy scheme?
Help to Buy is the Australian Government's shared equity scheme that launched in late 2025. Under the scheme, the government contributes a share of the purchase price of your home: - **New homes:** Government contributes up to **40%** of the purchase price - **Existing homes:** Government contributes up to **30%** of the purchase price You own the rest. The government's share is NOT a loan — there are no interest charges, no rent on their portion, and no repayments required. The government simply holds an equity stake in your property. This means you need a much smaller mortgage. Instead of borrowing 80-95% of a property's value, you might only need to borrow 55-65%. This dramatically reduces your mortgage repayments. **Example:** Buying a $600,000 new apartment: - Without Help to Buy: $120,000 deposit (20%) + $480,000 mortgage - With Help to Buy: $12,000 deposit (2%) + $348,000 mortgage (58%) + $240,000 government share (40%) - Monthly repayment saving: approximately $850/month at current rates
Who is eligible?
The eligibility criteria for Help to Buy: **Income caps (updated):** - Singles: taxable income up to $100,000 per year - Joint applicants and single parents: combined taxable income up to $160,000 per year - These caps are indexed annually to wage growth on July 1 **Deposit:** Minimum 2% of the purchase price (no maximum). You won't pay LMI despite the low deposit — the government's equity share covers the gap. **Citizenship:** Australian citizen aged 18+. Permanent residents are NOT eligible (this differs from the First Home Guarantee). **Property ownership:** You must not currently own property in Australia. Not limited to first home buyers — if you haven't owned property for some time, you may qualify. **Occupancy:** You must live in the property as your principal place of residence. It cannot be used as an investment property. **Income review:** If your income rises above the threshold for 2 consecutive years, a review is triggered and you may need to start buying out the government's share. Full re-assessment occurs every 5 years. **Limited places:** The scheme is capped at 10,000 places per year nationally (over 2,300 already approved). It's allocated on a first-come, first-served basis, with places released quarterly.
Property price caps by location
Each state and territory has maximum property price caps. These reflect local market conditions: **New South Wales:** - Sydney: $1,300,000 - Regional NSW: varies by location **Victoria:** - Melbourne: $950,000 - Regional VIC: varies by location **Queensland:** - Brisbane: $1,000,000 - Regional QLD: varies by location **Western Australia:** - Perth: $850,000 - Regional WA: varies by location **South Australia:** - Adelaide: $700,000 - Regional SA: varies by location **ACT:** $900,000 **Note:** Tasmania has not yet passed enabling legislation to participate. WA and NT are now participating. Property price caps are indexed annually on July 1. These caps have increased significantly from the original announcement — Sydney's cap was originally $950,000 and is now $1.3 million. Always check the firsthomebuyers.gov.au website for the most current figures.
How the government equity share works
Understanding the equity share is critical because it affects you when you sell, renovate, or want to buy the government out. **The government holds a percentage, not a dollar amount.** If the government contributes 40% of a $500,000 home ($200,000), they own 40% of the property — not $200,000. If the property rises to $700,000, the government's share is now worth $280,000 (40% of $700,000). **When you sell:** - You repay the government's share based on the sale price - If property values rise, the government benefits proportionally - If property values fall, the government shares in the loss - There's no penalty for selling — you just settle the equity share **Buying out the government:** - You can buy out the government's share at any time (called 'staircasing') - You can do it gradually — buy 5% at a time - The buyout price is based on a current market valuation - This is common as your income grows and you can afford a larger mortgage **Income changes:** - If your income rises above the cap after purchase, you're not forced to sell or buy out - But if your income exceeds $120,000 (single) or $160,000 (couple) for a sustained period, you may be required to start reducing the government's share **Renovations:** - You need Housing Australia's approval for major renovations - The value of improvements benefits you AND the government proportionally
Help to Buy vs First Home Guarantee — which is better?
Both schemes help first home buyers, but they work very differently: **Help to Buy (shared equity):** - Government buys up to 40% of the home — reducing your mortgage - Income cap: $100K single / $160K joint/single parent - Deposit: as low as 2% - Government shares in capital growth - Must be Australian citizen - 10,000 places/year - Only 2 participating lenders (CBA, Bank Australia) **First Home Guarantee (LMI waiver):** - Government guarantees your loan — no LMI with 5% deposit - Income cap: $125K single / $200K couple (higher!) - Deposit: as low as 5% - You keep all capital growth - Citizens and permanent residents eligible - 35,000 places/year (more available) - 30+ participating lenders **When Help to Buy is better:** - Your income is under $100K/$160K - You want the absolute lowest mortgage repayments - You're okay sharing capital growth with the government - You can only manage a 2% deposit **When First Home Guarantee is better:** - Your income is $100K-$200K (too high for Help to Buy) - You want to keep ALL capital growth - You want more choice of lenders (30+ vs 2) - You're a permanent resident (not citizen) - You can manage a 5% deposit For most buyers earning $100K+, the First Home Guarantee is the better deal because you keep all the upside and have more lender choice. Help to Buy is designed for buyers who genuinely couldn't afford a home otherwise and need the government to co-own part of it.
How to apply for Help to Buy
**Step 1: Check your eligibility** - Confirm your income is under the cap - Confirm you don't currently own property - Australian citizen, aged 18+ **Step 2: Get pre-approved for a mortgage** - You still need a home loan for your share (58-68% of the property) - Only two lenders participate: **Commonwealth Bank** and **Bank Australia** - Contact one of these lenders to start your application **Step 3: Apply through the participating lender** - Applications are processed through CBA or Bank Australia, in conjunction with firsthomebuyers.gov.au - You'll need: tax returns, payslips, ID, and your loan pre-approval - Applications are processed on a first-come, first-served basis - If places are full for the quarter, you'll be waitlisted for the next release **Step 4: Find a property** - Once approved, you have 12 months to find and purchase a property - Must be under the price cap for your area - Must pass an independent valuation **Step 5: Settlement** - At settlement, the government contributes their share - You contribute your deposit and the bank funds your mortgage - You move in as the homeowner — it's your home to live in **Timing tip:** New places are released quarterly. If you're serious, get your paperwork ready and apply early in the quarter for the best chance of securing a place.
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General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.
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