The Help to Buy Scheme Explained (Updated For 2025)
- Colin Green
- May 21
- 5 min read
For many Australians getting on the property ladder might have seemed a little out of reach in the last few years. Saving enough for a house deposit in the current economic climate is challenging and has been the source of much recent political debate. The good news is that the Federal Government is due to introduce the new Help To Buy Scheme later in 2025 which should make things significantly easier for more Aussies to buy their own home, with lower deposits and smaller mortgages.
What Is the Help to Buy Scheme?
The Help to Buy scheme is a federal government initiative designed to assist low- and middle-income earners in purchasing a home through a shared equity arrangement. It allows eligible buyers to purchase a home with as little as a 2% deposit. The government contributes up to 40% of the property's value for new homes and up to 30% for existing homes, holding an equivalent equity stake in the property. This shared ownership model reduces the size of the mortgage needed and eliminates the requirement for Lenders Mortgage Insurance (LMI).
How Does Help to Buy Work?
The new scheme is expected to help more than 40,000 Australians enter the housing market by reducing the deposit you need to save and potentially reducing your monthly mortgage repayments. With the Federal Government co-funding 30% or 40% of the cost of a new home, this means you would only need to secure a mortgage for the remaining 60 to 70%.
While the Government would effectively co-own up to 40% of your home, you would not need to pay ‘rent’ on this portion of the property they own. Once you are in a stronger financial position, after the first 2 years, you would also have the option to start buying back the Government’s equity stake. This would involve buying back the Government’s share of the home in 5% increments.
Here’s a summary of the key points:
Deposit: Minimum of 2% of the property's purchase price.
Government Contribution:
Up to 40% for new homes.
Up to 30% for existing homes.
Mortgage: The remaining percentage is financed through a standard home loan from a participating lender.
Ownership: The buyer and the government co-own the property proportionally.
Repayment: Buyers can choose to repay the government's share over time or upon the sale of the property.
Occupancy: The property must be the buyer's primary residence.
No Rent or Interest: No rent or interest is charged on the government's share.
When Will the Scheme Start?
The Help to Buy scheme was first proposed by the Labor Government in 2022, with further amendments announced in the latest Federal Budget in March 2025 and is expected to commence later this year. The exact start date will be announced once the program's administrative arrangements are finalised.
What Are The Eligibility Criteria For Help To Buy?
To be eligible for the Help To Buy scheme, you will need to meet specific criteria.
You have to be an Australian citizen aged 18+.
You have to be buying a property to live in and you cannot currently own any other property in Australia or overseas.
You will need to have saved the minimum 2% deposit required and be able to finance the remainder of the loan.
You will also have to prove that you can cover all associated up-front costs, such as stamp duty, legal fees and bank fees.
Your annual income must be less than $100,000 for an individual applicant or less than $160,000 for couples.
There are also specific limits on how much you can bid for depending on where you live. The specific thresholds vary by region, so it's important to familiarise yourself with the guidelines in your area. We cover this in the next section.
Note: If a participant's income exceeds the maximum allowed for two consecutive years, they may be required to repay the government's financial contribution in part or whole, as their circumstances permit.
Property Price Caps by State and Region
The scheme imposes property price caps, which vary by state and region to reflect local market conditions and will cover a range of dwellings including new houses, established homes, units, townhouses and duplexes. These caps have been increased in the 2025 Federal Budget to accommodate rising property prices and more than 5 million properties in Australia fall under the new property price caps.
Note: Capital city and regional centre caps apply to areas such as Newcastle, Lake Macquarie, Illawarra, Geelong, Gold Coast, and Sunshine Coast.
How to Apply for the Help to Buy Scheme
Applications for the scheme are not yet open at the time of writing this article (May 2025). However, it is expected to start later this year. There will initially be 10,000 places a year open on this scheme and it is expected to run for 4 years. Queensland will have approximately 2,000 of the 10,000 national places available each year for 4 years.
When applications do open, the process will look something like this:
Check Eligibility: Ensure you meet the income, citizenship and property ownership criteria.
Prepare Documentation: Gather necessary documents, including proof of income, identification and details of the property you intend to purchase.
Apply Through a Participating Lender: Submit your application via a lender participating in the scheme.
Government Assessment: The government will assess your application and determine the level of equity contribution.
Finalise Purchase: Proceed with the property purchase, incorporating the government's equity contribution into the transaction.
Why Is Help to Buy a Game-Changer?
The scheme represents an exciting opportunity for many more Australians to get on the property ladder with a reduced financial burden. The key benefits include:
✅ Lower deposit required – just 2%
✅ No Lenders Mortgage Insurance – save thousands
✅ Reduced loan size – more manageable repayments
✅ Backed by the Government – offering long-term security
✅ Opportunity to enter the market sooner
Of course, there are some things to be aware of:
You’re entering into a shared ownership model – the government will own part of your property until you buy them out. You must stay within the price cap and income thresholds.
You can’t use the scheme to buy an investment property – it must be your home.
Limited Places: The scheme offers up to 10,000 places per year over four years, totaling 40,000 spots.
The information in this article is however general in nature as the final details of the scheme have not yet been confirmed. It also doesn’t take into account your personal circumstances or financial situation.
If you are looking to buy or build your first home, the experienced home loan experts from CJG Finance can help you navigate the process.
To find out more, contact us or call Colin at CJG Finance on: 0402 413 917 or email him: cgreen@cjgfinance.com.au
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