For many Australians, stepping onto the property ladder can feel financially overwhelming. That’s why a number of government support programs exist to help ease the path. The Help to Buy Scheme is one such initiative, offering eligible buyers a co-ownership option that may reduce the upfront burden of purchasing a home. Here’s how it works.

Buying a home in Australia is an exciting milestone, but for many, it can also feel like an impossible dream. House prices have surged in recent years, and while wages have struggled to keep up, interest rates have climbed – making it more expensive to borrow money.

On top of that, saving a deposit big enough to satisfy lenders (especially when you’re also paying rent) can take years.

The result? A growing number of Australians are finding themselves priced out of the market. This is especially the case for younger people, single-income households, and low- to middle-income earners.

Now, there are government programs in place aimed at making homeownership more accessible . One is the Help to Buy Scheme, introduced by the Australian Government to assist with reducing the upfront financial requirements of purchasing a home.

What is the Help to Buy Scheme?

The Help to Buy Scheme is a shared equity program developed by the Australian Government. It’s designed to help eligible Australians buy a home by reducing the amount they need for a deposit and lowering their monthly mortgage repayments .

Under the scheme, buyers only need to contribute a minimum deposit of 2%, and don't have to take out Lenders Mortgage Insurance . The government then contributes:

• Up to 40% of the purchase price for a new home
• Up to 30% for an existing home

In exchange, the government holds a shared equity interest in your property. That means it owns a portion of your home. The government is then entitled to that same percentage when the property is sold, or when you’re ready to buy out its share.

Here’s an example to put it into context:

Let’s say you want to buy a new home valued at $700,000. With Help to Buy, you could:

• Contribute a 2% deposit ($14,000)
• Receive a 40% government contribution ($280,000)
• Take out a home loan for the remaining 58% ($406,000)

This setup can lower your loan size and reduce your ongoing interest costs . It may also make it possible to enter the property market sooner, even if your deposit is relatively small compared to traditional lending requirements.

Unlike other assistance programs, this isn’t a grant or a tax offset – it’s a co-ownership arrangement. You still live in the home, maintain it, and pay the bills. But, the government remains a silent partner until you choose to buy out their share or sell the home.

Who is eligible for the Help to Buy Scheme?

The Help to Buy Scheme is targeted at Australians on lower to moderate incomes, and comes with a range of eligibility requirements.

To qualify, you must:

1. Be an Australian citizen

Only Australian citizens aged 18 years and over can apply. Permanent residents and visa holders are currently excluded from the scheme.

2. Meet the income thresholds

The scheme is means-tested. You must have:

• An annual income of $100,000 or less if applying as an individual
• A combined annual income of $160,000 or less if applying as a couple

3. Be a first home buyer, not a property owner

You cannot currently own any interest in a property in Australia or overseas. The scheme is for people looking to enter the property market, not those who already have a foothold.

4. Live in the property

The home must be your principal place of residence. You cannot use the Help to Buy Scheme to purchase an investment property or holiday home.

5. Be able to secure a home loan

You’ll need to qualify for a mortgage with a participating lender, and demonstrate that you can afford the repayments (even with the reduced loan size).

6. Provide a minimum deposit

A deposit of at least 2% of the property value is required. While that’s much lower than the typical 10–20% deposit , you’ll still need to cover additional costs associated with buying a home . These include legal fees, building inspections, and stamp duty (though concessions may apply depending on the state you’re buying in).

7. Choose a home within price caps

Each state and territory has set maximum property price thresholds for eligible homes. These reflect the relative cost of housing in different areas, with higher limits for capital cities and lower caps for regional locations. For example:

• Sydney and NSW regional centres: $1.3 million
• Melbourne and Victorian regional centres: $950,000
• Canberra, Brisbane and Queensland regional centres: $1 million
• Other areas: typically $500,000–$800,000, depending on the location

The scheme is capped at 10,000 participants per year, so even if you meet all the criteria, places are limited.

What are some of the potential drawbacks of this scheme?

While the Help to Buy Scheme can offer meaningful support, it’s important to understand the conditions that come with it. Here are some things to consider before applying:

1. The government owns a share of your home

Because this is a shared equity arrangement, the government will be entitled to a portion of your home’s future sale price. Alternatively, you'll need to pay it out if you decide to buy back its share. If your property increases in value, the amount you owe the government grows too.

So while you benefit from lower repayments, you also give up some of the potential upside of capital growth .

2. Restrictions on refinancing and renovations

If you want to refinance your mortgage, make significant renovations, or rent out the property, you may need government approval. This can limit your flexibility and autonomy as a homeowner.

3. You’ll eventually need to repay the equity share

The scheme isn’t a grant – it’s more like a deferred payment plan. Whether you’re planning to stay in the home long-term or sell in a few years, you’ll need to budget for the cost of repaying the government’s stake at some point.

4. It’s not available forever

As a capped program with only 10,000 places per year, the scheme is highly competitive. There’s also the possibility that a future government may change or discontinue it, which creates some uncertainty around its long-term future.

Can the Help to Buy Scheme be used in conjunction with other programs?

Yes – you can use the Help to Buy Scheme alongside other first home buyer initiatives, which can make buying a home even more achievable.

Here are two key programs you might combine it with:

1. First Home Owner Grant (FHOG)

The FHOG is a state-based grant available to first home buyers purchasing or building a new home. The amount varies by state or territory, but can range from $10,000 to $20,000, and may come with additional benefits such as stamp duty concessions.

If you’re eligible, you can use this grant to boost your deposit, reduce upfront costs, or go toward fees and charges.

2. First Home Super Saver (FHSS) scheme

The FHSS scheme lets you save for a deposit using concessional (pre-tax) contributions to your super fund, then withdraw the money to buy your first home. You can access up to $50,000 in eligible contributions (plus earnings), making it a useful tool for building your deposit tax effectively.

You could use the FHSS scheme to establish your 2% deposit. Help to Buy may then reduce the size of your mortgage, while the FHOG could help offset some of the upfront costs. Together, these programs might make home ownership more achievable than it first appears.

Could Help to Buy get you into a home sooner?

Taking the first step toward owning your home can seem daunting, but there are tools and support available to help guide the process. The Help to Buy Scheme is one of the most significant steps the Australian Government has taken to level the playing field for aspiring homeowners. For eligible buyers, it can reduce the upfront burden, ease the cost of repayments, and shorten the journey to home ownership.

But like any shared equity arrangement, it’s important to go in with eyes wide open. Think about your future goals, understand the trade-offs, and make sure the structure suits your lifestyle – not just today, but over the long haul.

And remember, it's important to do your own homework before jumping into a new scheme. Whether it’s comparing lenders, understanding your obligations, or planning for the day you repay the equity share, knowledge is power.

For the latest information on the scheme and how to apply, your best bet is to visit the Housing Australia website .