What Help to Buy Is
Help to Buy is the federal government's shared equity home ownership scheme, administered by Housing Australia (the national housing finance and investment corporation). Under the scheme, the government takes a co-ownership stake in the property at the time of purchase, reducing the buyer's loan size, minimum deposit requirement, and monthly repayments. The government contributes up to 40% of the purchase price for new builds, or up to 30% for existing homes.
The buyer needs a minimum 2% deposit and takes out a mortgage for the remainder of the purchase price after subtracting both the government contribution and the buyer's deposit. No Lenders Mortgage Insurance is payable, which is one of the scheme's material financial benefits. The buyer owns the home and lives in it, but the government holds a proportional equity stake that must eventually be bought out or repaid when the property is sold. The scheme is designed for buyers who cannot accumulate a conventional deposit quickly enough given rising property prices in their target market.
Eligibility in 2026
To be eligible for Help to Buy in 2026, buyers must meet all of the following criteria. Income: the gross income cap is $90,000 per year for single buyers, and $120,000 combined for couples (both parties count toward the combined threshold). Income is assessed on the most recent year's taxable income. Citizenship: the buyer must be an Australian citizen. Permanent residents do not qualify for this scheme, unlike some state schemes. Property ownership: the buyer must not currently own property in Australia and must not have owned residential property within the last 10 years. Intention to occupy: the property must be the buyer's principal place of residence from the time of settlement.
Property price caps in NSW: $950,000 for properties in Sydney and major regional centres, and $800,000 for other NSW areas. The scheme has a limited number of places, allocated on a first-come, first-served basis through a panel of participating lenders. Only Australian citizens who meet the income and property criteria and are purchasing through a participating lender can access the scheme.
How the Government Contribution Reduces the Loan
The financial mechanics are clearest through a worked example. Consider a Sydney property priced at $900,000 (an existing home within the NSW price cap). The government contributes 30% of the purchase price: $270,000. The buyer's minimum 2% deposit: $18,000. The buyer's loan: $900,000 minus $270,000 (government) minus $18,000 (deposit) = $612,000.
Without Help to Buy, using a conventional 20% deposit approach, the same buyer would need $180,000 in savings and a loan of $720,000. Without Help to Buy but using the First Home Guarantee (5% deposit, no LMI): deposit $45,000, loan $855,000. The Help to Buy loan of $612,000 is $108,000 less than the 20% deposit loan and $243,000 less than the 5% First Home Guarantee loan. The monthly repayment difference on a $243,000 loan reduction at current rates is approximately $1,500 per month. Over the life of the loan, this is a substantial reduction in repayment burden, balanced against the eventual cost of buying out the government's 30% equity stake at the then-current market value.
Buying Out the Government Stake
The government's equity stake does not need to be bought out immediately or within any specific timeframe. The buyer can buy back increments of the government's stake at any time, with a minimum buyback of 5% of the total property value at each transaction. This allows buyers to progressively increase their ownership as their financial circumstances improve.
The most important consideration is that the government's stake is proportional to the current property value, not the original purchase price. If a property purchased for $900,000 increases in value to $1.1 million, the government's 30% stake is worth $330,000 at buyout rather than the original $270,000. The appreciation in the property's value accrues proportionally to both the buyer and the government. On sale, the government receives its proportional share of the sale proceeds before the net equity is distributed to the seller. If a buyer plans to hold the property for a long period in a market they expect to grow, the cost of buying out the government stake will increase over time.
How It Compares to Other Schemes
Help to Buy sits alongside several other federal and state schemes that serve overlapping but distinct populations. The First Home Guarantee (FHBG) requires a 5% deposit but no LMI, with the government providing a guarantee rather than equity. The buyer owns 100% of the property from the start. The FHBG suits buyers who can save 5% and want full ownership. The income cap for the FHBG is $125,000 for singles and $200,000 for couples, which is broader than Help to Buy.
The NSW Shared Equity Home Buyer Helper is a state scheme with overlapping coverage and specific priority groups (key workers, single parents, older single buyers). The property price cap under the NSW scheme differs: $950,000 for metropolitan areas and $600,000 for regional areas, compared to Help to Buy's $800,000 for non-metropolitan NSW. Both the federal and NSW shared equity schemes require purchase through a participating lender panel and impose a co-ownership structure. A buyer eligible for both should compare the specific terms, income caps, and participating lender options for their circumstances before applying.
Participating Lenders
Help to Buy operates only through Housing Australia's approved lender panel. Not all banks and lenders participate. The panel includes a defined set of authorised deposit-taking institutions and other approved lenders who have agreed to Housing Australia's scheme terms. A broker can confirm which participating lenders are currently accepting applications and, critically, which lenders have remaining allocation capacity for the current financial year's scheme places.
Scheme place allocations run on a financial year basis. Lenders are allocated a pool of scheme places and process applications until their allocation is exhausted. When a lender's allocation runs out, applicants may be placed on a waitlist or directed to another participating lender with remaining capacity. This is a practical operational consideration, particularly if you are applying later in the financial year. A broker who works regularly with the participating lenders will have current knowledge of which lenders have capacity.
Who the Income Caps Suit in Practice
The income caps of $90,000 for singles and $120,000 for couples align closely with many first home buyers who work as teachers (Step 5 permanent: approximately $85,000 to $92,000), registered nurses (Grade 3: approximately $85,000 to $105,000 base before penalties), administrative professionals, and tradespeople. A couple where one partner earns $75,000 and the other earns $45,000 would be eligible. A single teacher on $89,000 would be eligible. A single nurse on $105,000 including shift penalties might exceed the $90,000 base income cap depending on how assessable income is calculated. These boundary cases are worth confirming with a broker before making property search decisions.
Frequently Asked Questions
How many places are available in Help to Buy in 2026?
The federal Help to Buy scheme operates with a capped number of places each financial year. The scheme is allocated on a first-come, first-served basis through participating lenders. Places are finite, and the scheme has historically exhausted allocations before the end of the financial year in high-demand periods. The exact number of places for the 2026-27 financial year is determined by Housing Australia and announced in the federal budget. When places run out, new applicants are placed on a waiting list or must wait for the next allocation round. This is a material operational consideration. Applying early in the financial year gives the best chance of securing a place. A broker who works with participating lenders can advise on current allocation availability and which lenders still have active scheme capacity.
What happens if I want to rent the property out in the future?
Help to Buy is an owner-occupier scheme. The property must be your principal place of residence for the duration of the government's co-ownership stake. Moving out and renting the property triggers a requirement to either buy out the government's equity stake in full or sell the property. There is no provision for converting Help to Buy to an investment property while the government holds a stake. If your circumstances change and you need to move, you would typically need to refinance to buy out the government's proportional share at the current market value before renting the property. Given how property values can grow over time, a 30% or 40% government stake bought out at a higher property value could represent a significant sum. This is a consideration when assessing Help to Buy against the First Home Guarantee, which imposes no ongoing co-ownership obligations.
Is Help to Buy better than the First Home Guarantee?
The answer depends on your specific situation. The First Home Guarantee allows first home buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance, backed by a government guarantee. The buyer owns 100% of the property from day one and has no co-ownership obligation. Help to Buy requires only a 2% deposit, which is achievable faster for buyers in high-cost markets, and reduces the loan size by 30% to 40%. However, the government holds a proportional equity stake that appreciates in line with the property, so the cost of buying out the government increases if the property grows in value. For a buyer who can save 5% relatively quickly and wants full ownership immediately, the First Home Guarantee is typically the cleaner outcome. For a buyer who cannot reach 5% in a reasonable timeframe in a rising market, Help to Buy's 2% entry point may be more practical. The income and property price caps differ between the two schemes, so eligibility is also a determining factor.
Find out which scheme you qualify for in 2026
Help to Buy, the First Home Guarantee, and the NSW Shared Equity scheme have different eligibility criteria and financial implications. A 30-minute call can clarify which scheme fits your situation and which lenders have current capacity.
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