Help to Buy Scheme: The Complete Guide

🏛️ What is the Help to Buy scheme?🔗

Help to Buy is a federal government shared equity program administered by Housing Australia, launched 5 December 2025 and now available nationwide across all eight states and territories. The government contributes up to 40% of the purchase price for a new home or up to 30% for an existing home, with a minimum government contribution of 5%. Buyers need a minimum 2% deposit from genuine savings, and 10,000 places are available per financial year, with a total cap of 40,000 places across the scheme's first four years. Applications go through participating lenders only, not directly to Housing Australia.

It's aimed at low-to-middle income Australians who've saved what they can but still can't bridge the gap to a full deposit. It's worth being clear on one thing upfront: it's not a grant. The government's contribution has to be repaid, either on sale or by buying the government out over time.

🤝 How the shared equity mechanism works🔗

You're the sole registered owner of the property, your name is on the title. The government holds a contractual equity interest secured by a second mortgage registered on the title, sitting behind the lender's first mortgage. You pay your home loan to your participating lender as normal, pay nothing to the government while you live there (no interest, no rent), and the government's share is repaid later based on the property's value at that time, not the dollar amount it originally contributed.

Worked example: Rob buys a home for $800,000. Deposit $16,000 (2%), home loan $544,000, government contribution $240,000 (30%). Rob's loan-to-value ratio works out to 68%, well under the 80% threshold that triggers Lenders Mortgage Insurance, so he pays no LMI. He makes normal repayments to his lender, and the government's 30% equity interest is repaid when Rob sells or buys the government out.

✅ Am I eligible?🔗

Income is assessed using your ATO Notice of Assessment for the most recent financial year. For FY2026-27, effective from 1 July 2026 and indexed annually, the caps are: single applicant $103,000, joint applicants combined $165,000, and single parent with at least one dependent $165,000. The applicable threshold is the one in effect at final approval, not first application, so a raise between applying and settling can matter. Income counted includes wages, salary-sacrificed amounts, bonuses, investment income and business income. Child support payments and lump-sum workers compensation payouts are excluded.

These caps aren't indexed, they're set and changed by separate government policy decisions, so use the postcode lookup tool on firsthomebuyers.gov.au to confirm the exact cap for a specific suburb rather than relying on a figure you've seen elsewhere.

🎯 The essential: You need to be Australian citizen (permanent residents aren't eligible), and not currently own property anywhere in the world, but a financial capacity test is the part most guides skip: if your lender assesses that you could afford the property without Help to Buy, you're ineligible.

The rest of the eligibility checklist: aged 18 or over; can have owned property before, just not now, with limited exceptions for single parents buying out a co-owner or selling an existing property within 4 weeks of settlement; owner-occupier only, you can't rent the property out while in the scheme; can't combine Help to Buy with other government shared equity schemes or housing loans, though you can still claim first homeowner grants and stamp duty concessions; and you must contribute the maximum reasonable deposit you can afford, not just the 2% minimum.

If you're buying in Queensland, that means Help to Buy can be stacked with the $30,000 QLD First Home Owner Grant on a new home, on top of the equity contribution above.

📝 How to apply🔗

Applications go through participating lenders, not directly to Housing Australia. As of mid-2026, the confirmed participating lenders are Commonwealth Bank, Bank Australia, Teachers Mutual Bank, Health Professionals Bank, Firefighters Mutual Bank and UniBank (the last four all operate under the Teachers Mutual Bank group). More lenders are expected to join the panel through 2026, so it's worth checking the current list on firsthomebuyers.gov.au before assuming a lender you already bank with is included.

The application sequence, step by step:

1. Check eligibility using the Help to Buy Eligibility Tool on firsthomebuyers.gov.au.

2. Contact a participating lender, who assesses your financial position and guides you through the paperwork.

3. Prepare your documents: proof of identity, Australian citizenship, your ATO Notice of Assessment, bank statements showing genuine savings, and your assets and liabilities.

4. Receive conditional approval, which reserves a place for 90 days, extendable by a further 90 days, 180 days maximum.

5. Find a property and sign a contract of sale with a "subject to finance" clause, allowing at least 30 days between signing and settlement.

6. Final approval and settlement within 90 days of final approval, Housing Australia's conveyancer contacts you to sign the Participation Agreement and National Mortgage Form.

⚖️ Help to Buy vs First Home Guarantee: which one suits you?🔗

These two government schemes get confused constantly, and they work in genuinely different ways.

In plain English: with the First Home Guarantee, the government simply guarantees part of the loan to avoid LMI, you own 100% and keep 100% of any capital gains. With Help to Buy, the government actually puts money into the purchase and owns a slice of the home's value until you buy it out or sell. If you can save a 5% deposit and want to own outright from day one, the First Home Guarantee is worth considering first. If a 5% deposit is still out of reach, or the smaller Help to Buy repayments would meaningfully help your budget, Help to Buy may be the better fit. Neither charges LMI.

🔑 What happens when you sell, or want to buy the government out?🔗

Selling: you can sell any time, and must notify Housing Australia promptly once you accept an offer. Proceeds are distributed in order: the lender is repaid first (outstanding mortgage balance), then Housing Australia receives its proportional share of the current sale price (or a current valuation if higher), then you receive the remainder. Enter the scheme with a 30% government stake and sell for $1,000,000, and the government receives $300,000, regardless of the original dollar amount it contributed.

Buying the government out: you don't have to wait until you sell. You can voluntarily buy back equity in increments at any time, with a minimum buyout increment of 5% of the current property value per repayment. On a home worth $900,000, the minimum voluntary repayment is $45,000. You pay for the valuation required to calculate the buyout amount, and can fund it from savings or by refinancing with your participating lender. To refinance with a non-participating lender, you need to buy out the government's share in full first.

If your income rises above the threshold: Housing Australia reviews your arrangement every 5 years. If your taxable income exceeds the relevant threshold for two consecutive financial years, Housing Australia may require you to repay part or all of the government's equity share. In practice, the participating lender conducts a financial capacity assessment: if the government's equity share is greater than 5% of the property's value, you must repay at least 5% of current value; if it's 5% or less, you must repay the full remaining amount. If the lender determines you can't afford the repayment, Housing Australia won't force it immediately, and reassesses within 12 months. It also won't require a repayment that would force you to take out LMI. It's not an automatic forced sale, but a managed process worth planning for if income growth is likely for you.

🎯 The real trade-offs (be honest with yourself)🔗

Every deposit path involves a trade-off. Here's what Help to Buy genuinely gives you, and what it genuinely costs.

🤔 Is the Help to Buy scheme right for you?🔗

It works best for buyers who value getting into the market now over maximising long-term capital growth. It's likely a good fit if you've saved what you can but still can't bridge the gap, your income is stable and unlikely to jump significantly above the threshold soon, you plan to live in the property long-term and gradually buy out the government's share, or smaller mortgage repayments would genuinely improve your financial position.

It's probably not the right fit if you expect strong income growth that could trigger a buyout obligation within a few years, you want the flexibility to rent the property out or use it as an investment, or you're planning heavy renovations and want to capture 100% of the value uplift. On that last point, renovations over $21,000 do reduce the government's percentage share, so there's some benefit built in even under the scheme. And if you could already afford the property without Help to Buy, you'd fail the financial capacity test anyway, so the scheme wouldn't be available to you regardless.

If you're on the fence, talk to a mortgage broker who understands the scheme and can model both scenarios against your specific numbers, rather than guessing from general rules of thumb. If you'd rather see where a smaller mortgage leaves your budget, run the numbers directly.

❓ Frequently asked questions🔗