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Help to Buy Scheme 2026: How the Shared Equity Scheme Works
Launched federally in December 2025, the Help to Buy scheme lets eligible first home buyers purchase with as little as a 2% deposit — with the government taking an equity stake in the property in return. Here's exactly how it works, who qualifies, and what the trade-offs are.
Important: This article is general information only and does not take into account your personal circumstances. Help to Buy scheme eligibility, price caps and place availability are set by the Australian Government and Housing Australia, and are subject to change. Please confirm current details with a qualified mortgage broker before applying.
What Is the Help to Buy Scheme?
The Help to Buy scheme is a federal shared-equity program administered by Housing Australia. Instead of borrowing the full purchase price, the government co-invests in your home — contributing up to 30% of the price for an existing home, or up to 40% for a new home — in exchange for an equivalent equity share.
Key takeaway: A smaller deposit and smaller loan mean lower repayments, but the government's equity share means you don't own 100% of your home — and that share affects what you keep when you sell or refinance.
How Does the Help to Buy Scheme Work?
Say you buy a $600,000 new home under Help to Buy with the maximum 40% government contribution. The government contributes $240,000 in exchange for a 40% equity share, and you only need to fund the remaining $360,000 — through your deposit and a home loan.
Because you're borrowing less, your loan repayments are lower than they would be under a standard purchase. Over time, you can buy back the government's equity share in portions, once your income or circumstances improve — this is sometimes called "staircasing."
Help to Buy Scheme Eligibility
| Requirement | Detail |
|---|---|
| Minimum deposit | 2% |
| Government contribution | Up to 30% (existing home) or 40% (new home) |
| Income cap | $100,000 (single) / $160,000 (couples & single parents) |
| Price cap (Melbourne) | $950,000 |
| Property use | Must be your principal place of residence |
Source: Housing Australia. Income caps and price caps are reviewed periodically.
Important: Unlike the First Home Guarantee, Help to Buy does have an income cap. If your household income is close to or above these thresholds, the First Home Guarantee may be a better fit.
How to Apply for the Help to Buy Scheme
- Check your income against the cap — $100,000 single, $160,000 for couples/single parents.
- Check the property price against the cap — $950,000 for Melbourne.
- Register your interest — places in the scheme are limited each year, so timing matters.
- Apply through a participating lender — as part of a standard home loan application process.
- Settlement — the government's equity contribution is applied at settlement alongside your loan.
Help to Buy vs First Home Guarantee
These two federal schemes solve different problems, and understanding the trade-off is essential:
| Help to Buy | First Home Guarantee | |
|---|---|---|
| Deposit needed | As little as 2% | 5% |
| Government equity | Up to 30–40% government equity share | None — you own 100% |
| Income cap | $100k single / $160k couple | None |
| Best for | Buyers with a very small deposit, comfortable sharing equity | Buyers with a modest deposit who want full ownership |
What Happens When You Sell?
When you sell (or choose to buy back the government's share early), the government receives the same percentage of the sale price as its original equity contribution — not just the original dollar amount. If your property has grown in value, the government's share grows with it, which is an important trade-off to weigh against the lower upfront deposit.
How Be Smart Finance Can Help
Deciding between shared equity and full ownership is a significant financial decision. We can help you:
- Work out whether Help to Buy or the First Home Guarantee suits your situation better
- Check your eligibility against income and price caps
- Model your repayments under each scheme so you can compare the real numbers
- Apply through a participating lender
🎯 Are You Investment-Property Ready?
Take our free 2-minute quiz to see where you stand — income, savings, timeline and risk comfort.
Frequently Asked Questions
How much deposit do I need for Help to Buy?
As little as 2% of the purchase price, depending on the lender and your circumstances.
Does the government own part of my home under Help to Buy?
Yes. In exchange for its financial contribution, the government holds an equity share proportional to what it contributed — up to 30% for an existing home or 40% for a new home.
Is there an income cap for Help to Buy?
Yes — $100,000 for singles and $160,000 for couples and single parents.
Can I buy back the government's share later?
Yes, this is often referred to as "staircasing" — you can gradually increase your ownership share over time as your financial position improves.
Wondering Which Scheme Suits You?
Book Your Free First Home Buyer Review and we'll help you compare your options.
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