Breaking down the ‘Help to Buy’ scheme: How it works & what’s new in 2025
If you’ve been dreaming of homeownership but struggling with the financial hurdles, the Australian Government’s ‘Help to Buy’ scheme might just be the leg-up you need. With property prices continuing to challenge first-home buyers, this initiative aims to make the dream more achievable by lowering the upfront costs.
So, how does it work? Who’s eligible? And what’s changed in 2025? Let’s dive in.
How the ‘Help to Buy’ scheme works
At its core, the ‘Help to Buy’ scheme is a shared equity program, meaning the government contributes a portion of the home’s purchase price. In exchange, they retain a stake in the property. Here’s what that looks like:
- Up to 40% contribution for new homes
- Up to 30% contribution for existing homes.
This significantly reduces the amount buyers need to borrow, meaning lower mortgage repayments and a smaller deposit requirement – potentially as low as 2% of the home’s value. The best part? There’s no rent to pay on the government’s share.
Who can apply?
The scheme is designed to help Australians who would otherwise struggle to enter the housing market. To be eligible, you must:
- Be an Australian citizen aged 18 or over
- Earn $100,000 or less per year (or $160,000 for joint applicants or single parents)
- Live in the purchased home
- Not own any other property (in Australia or overseas)
- Meet financial criteria to prove you can handle the mortgage (this includes having saved the required minimum 2% deposit of the home price as well as managing costs such as stamp duty, legal fees and bank fees).
This means the scheme is not just for first-home buyers, but for anyone who meets the criteria and is looking to break into the market.
What’s new in 2025?
The 2025 Federal Budget has introduced some key changes to the scheme:
- More funding: An additional $800 million has been allocated, bringing the total investment to $6.3 billion over four years.
- Higher price caps: The maximum property price eligible for the scheme has increased, making more homes accessible to more buyers.
- Expanded eligibility: With income caps raised from $90,000 to $100,000 for singles, and from 120,000 to $160,000 for joint applicants and single parents, more Australians can now qualify.
Property price caps have also been increased in lie with the average house price in each state and territory. Previously, the price caps were determined by the price of dwellings, which also included apartments and units. As a result:
- Brisbane price caps have been raised from $700,000 to $1m
- Melbourne price caps have increased from $850,000 to $950,000, and
- Sydney price caps have moved from $950,000 to $1.3m.
(Note than the NSW price cap is set at $1.3m, not the median house price of $1.5m, to ensure prices remain within the borrowing capacity of first home buyers.)
In addition to the ‘Help to Buy’ scheme, the government is also investing $54 million into prefabricated and modular housing solutions to speed up construction and help ease supply constraints. A two-year ban on foreign investors buying established homes has also been introduced to prioritise local buyers.
A total of 10,000 places will be available to homebuyers over four years, capping the total at 40,000 places over four years.
Is the ‘Help to Buy’ scheme the right move for you?
The ‘Help to Buy’ scheme is a game-changer for eligible buyers who need an extra boost to enter the market. By reducing deposit and mortgage requirements, it makes homeownership more realistic for many Australians.
However, there are some things to consider. Since the government retains a share of your property, you won’t have full ownership outright unless you buy back their stake over time (or when selling). Additionally, there’s always the question of whether this initiative will genuinely improve affordability in the long run, given the ongoing housing supply challenges.
Still, for many, this could be the opportunity they’ve been waiting for. If you’re considering applying, it’s worth talking with us to explore how the scheme fits into your home-buying journey.
Final thoughts on the ‘Help to Buy’ Scheme
Buying a home is one of the biggest financial decisions you’ll ever make, and the ‘Help to Buy’ scheme is an exciting option for those struggling with rising costs. With new improvements in 2025, the program is set to support even more Australians in achieving their homeownership goals.
If you’re eligible and ready to take the next step, now might be the time to explore whether this scheme is the key to opening your front door.
Need help navigating your options? Reach out and we’ll guide you through the process!