How the Government’s Help To Buy Scheme Actually Works (Including The Updates In 2025)

With property prices rising and deposits harder than ever to save, many Australians are struggling to buy their first home. The Help to Buy scheme is designed to make home ownership more achievable, offering shared equity, low deposits, and expanded eligibility for first home buyers.

In the 2025 Federal Budget, the Government committed an extra $800 million, bringing total funding to $6.3 billion through 2028–29. Applications are expected to open later in 2025, and up to 40,000 Australians (10,000 each year) will be able to take part.

How does the updated Help To Buy Scheme work?

The scheme reduces the deposit hurdle and lowers ongoing mortgage repayments by allowing the Government to take an equity share in your property:

• Up to 40% of the purchase price for new builds.
• Up to 30% for existing homes.
• Only a 2% deposit required.
• No Lenders’ Mortgage Insurance (LMI) needed, since the combined equity meets the 20% threshold.
• The Government’s contribution is equity, not a loan, so you don’t pay rent or interest on their share.

Key Benefits

• Buy with a smaller deposit and a smaller mortgage.
• Estimated savings of around $900 per month (existing homes) or $1,200 per month (new builds).
• Flexibility to buy back more ownership in 5% increments as your circumstances improve.
• The Government shares in gains and losses when you eventually sell.

Who’s Eligible?

Eligibility has been expanded in 2025 to include more Australians. To qualify, you must:

• Be an Australian citizen, aged 18 or over.
• Earn $100,000 or less (single), or $160,000 or less (couple).
• Be a first home buyer and live in the property as your main residence.
• Not currently own property in Australia or overseas.
• Have at least a 2% deposit saved.
• Secure finance for the remaining share from a participating lender.
• Be able to cover upfront costs (stamp duty, legal fees, bank fees).

Property Price Caps (from October 2025)

The scheme now uses average house prices, raising the caps to better reflect today’s market. From 1 October 2025, the updated thresholds will be:

• Sydney: $1,300,000
• Melbourne: $950,000
• Brisbane and Canberra: $1,000,000
• Adelaide: $900,000
• Perth: $850,000
• Hobart: $700,000
• Darwin: $600,000

For regional areas, the caps are lower (e.g. NSW regional centres $800,000; VIC regional $650,000).

For the Help to Buy scheme to run in each state, the local government must pass laws to allow it.

• As of June 2025, the scheme is confirmed in Queensland, Victoria and New South Wales.
• Other states are still working on their approvals before the scheme can launch.
• Territories (like the ACT and NT) don’t need to pass extra laws, so the scheme can operate there automatically.

Selling & Repayment

Repayments under the Help to Buy scheme are always based on the current market value of your home.

• If your property has increased in value, the Government’s share rises proportionally.
• If your property has fallen in value, the Government also shares in the loss.

This means the Government benefits when your property goes up – but also shoulders part of the risk if it goes down.

Repayment can be triggered by three situations:

1. Sale of the property: you must repay the Government’s equity share when you sell.
2. Capacity to repay: if your income exceeds the eligibility threshold for two consecutive years, and you are financially able, the Government may require you to repay some or all of its contribution.
3. Voluntary buy-back: you can choose to repay earlier in minimum 5% increments (rounded to the nearest $1,000) at any time.

Refinancing rules:

• You can refinance with a participating lender without issue.
• If you want to switch to a non-participating lender, you may first need to repay the Government’s contribution in full.

Things to Keep in Mind

• This scheme is limited to 10,000 places per year, so prepare and apply early.
• Property must remain your principal residence.
• You can’t combine Help to Buy with other government home-buyer guarantees.
• You don’t need pre-approval for renovations, but if you make substantial improvements ($20,000 or more) you must notify Housing Australia.
• Income checks and reviews may apply to confirm continued eligibility.

Help To Buy Vs First Home Buyer Guarantee

These two programs are often mentioned together, but they are different schemes with separate rules. Here’s a clear breakdown to avoid confusion:

• Help to Buy = Government helps pay for part of your home (shared equity).
• First Home Buyer Guarantee = Government helps you avoid LMI by acting as guarantor (loan guarantee).

You can read more about the First Home Buyer Guarantee here.

Next Steps

Applications are expected to open in late 2025, and demand will be extremely high. To give yourself the best chance, start preparing your documents now, including photo ID, payslips, tax returns and bank statements.

It’s also a good idea to speak with a mortgage broker early to confirm your eligibility and borrowing capacity, so you’re ready to act as soon as the scheme opens.

👉 Book a Consultation with Aintree Wealth to review your eligibility and get started.

This is general advice only and has not been prepared with your individual situation or needs in mind. For personalised advice, we highly recommend that you seek professional guidance from a qualified adviser.