The Help to Buy Scheme: A Guide for Lower & Middle-Income Earners

The Australian Government’s Help to Buy scheme has officially launched, marking a significant shift in how eligible Australians can enter the property market. Since opening for applications on 5 December 2025, the scheme has already helped over 2,300 households move closer to home ownership, with 278 families already settled into their new homes.

For those who’ve watched property prices climb while savings struggle to keep pace, this shared equity program offers a genuine pathway into the market. Here’s what you need to know about how it works, who qualifies, and whether it might be right for your circumstances.

How the Scheme Actually Works

Help to Buy operates on a shared equity model. Rather than providing a grant or loan, the Australian Government becomes a co-owner of your property, contributing a substantial portion of the purchase price.

The government’s contribution is:

  • Up to 40% for new builds or newly constructed homes
  • Up to 30% for existing properties

You contribute a minimum 2% deposit plus a home loan from a participating lender for the remainder. Importantly, you don’t pay rent on the government’s portion, and there are no ongoing interest charges on their equity share.

The trade-off is that when you eventually sell or choose to buy out the government’s share, they receive a proportional amount of the sale proceeds or current valuation. If your property increases in value, the government shares in that gain. If it decreases, it shares in the loss.

Who Can Apply?

The scheme targets lower and middle-income earners who can service a home loan but struggle with the deposit hurdle. To qualify, you must:

  1. Meet the income thresholds:
  • Up to $100,000 annual taxable income for single applicants
  • Up to $160,000 for joint applicants and single parents
  1. Satisfy basic requirements:
  • Be an Australian citizen aged 18 or over
  • Not currently own any property in Australia or overseas
  • Intend to live in the home as your principal residence
  • Have at least a 2% deposit saved

The scheme isn’t exclusively for first home buyers. Some exceptions exist for single parents who may need to buy out a former partner or sell an existing shared property. Your income is reviewed every five years to ensure ongoing eligibility.

Understanding the Property Price Caps

To keep the scheme targeted at modest-priced homes, strict price caps apply. These vary significantly by location:

  • Sydney: $1,300,000
  • Melbourne: $1,000,000
  • Brisbane: $850,000
  • Perth: $750,000
  • Adelaide: $700,000
  • Canberra: $850,000
  • Regional areas: Range from $600,000 to $750,000, depending on the state

These caps mean the scheme works best in areas where median property prices align with program limits. In some capital city markets, particularly Sydney and Melbourne, finding suitable properties within the caps may require compromises on location or property type.

Where the Scheme Is Available

Help to Buy is currently operating in most states and territories, including New South Wales, Victoria, Queensland, South Australia, the ACT, and the Northern Territory. However, Western Australia and Tasmania are still progressing their enabling legislation and aren’t yet participating.

Applications are processed through participating lenders rather than mortgage brokers during the initial rollout. Commonwealth Bank and Bank Australia were among the first to offer the scheme, with more lenders expected to join.

The Real-World Impact

Early uptake figures tell a compelling story. Of the applications received:

  • 64% came from single applicants
  • 10% from single parents
  • The median deposit was just $29,000

How It Compares to Other Schemes

Help to Buy sits alongside the existing Home Guarantee Scheme (formerly the First Home Loan Deposit Scheme), but they work quite differently.

Home Guarantee Scheme:

  • Requires a 5% deposit
  • Government guarantees the loan, removing lenders’ mortgage insurance
  • You own 100% of the property from day one
  • No shared equity arrangement

Help to Buy:

  • Requires only a 2% deposit
  • Government takes an equity share
  • Allows you to target higher-priced properties on the same income
  • Shared ownership means shared future gains or losses

Research from Canstar shows that a borrower on a $90,000 income could borrow approximately $438,000 under either scheme. However, under Help to Buy, with a 2% deposit and 30% government contribution, they could purchase a property worth around $644,000. Under the Home Guarantee Scheme with a 5% deposit, the same borrower would be limited to a property worth about $461,000.

What to Consider Before Applying

The scheme offers clear advantages for eligible buyers:

  • Significantly lower deposit requirement
  • Reduced mortgage size and monthly repayments
  • No lenders’ mortgage insurance costs
  • Faster entry into the market

However, there are important considerations:

  • Only 10,000 places are available annually, and demand is strong
  • The government’s equity share must eventually be repaid
  • Five-yearly income reviews could create uncertainty
  • Property price caps may limit your options in expensive markets
  • Not all lenders are participating yet

You’ll also need to factor in your long-term plans. If you anticipate significant income growth or property value increases, buying out the government’s share later could be costly. Conversely, if you’re confident in your ability to service a larger loan down the track, the scheme provides breathing room to enter the market now.

Taking the First Step

If Help to Buy sounds like it might suit your circumstances, start by checking your eligibility against the income and property price caps for your target area. Gather your financial documents, including proof of income, savings statements, and employment details.

Contact participating lenders directly to discuss your application. While mortgage brokers aren’t processing Help to Buy applications during the initial phase, they can still provide valuable guidance on your overall borrowing capacity and whether this scheme or the Home Guarantee Scheme better suits your situation.

Remember, this is a significant financial decision involving shared ownership of what will likely be your most valuable asset. Seek independent legal, tax, and financial advice before proceeding. The right professional guidance will help you understand not just whether you qualify, but whether the scheme aligns with your long-term financial goals.

The Help to Buy scheme represents a genuine opportunity for eligible Australians to overcome the deposit barrier that’s kept many locked out of home ownership. With hundreds already moved in and thousands more approved, it’s proving that with the right support, the path to owning your own home can be shorter than you thought.

If you need help navigating your home loan options, contact Peel Finance Brokers to discuss your circumstances with our experienced team. We can help you understand which government schemes you may qualify for and find the right financing solution for your situation.

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