The Australian property market is witnessing a significant shift in accessibility as the federal Help to Buy scheme enters its third month of full operation. Launched in December 2025, this shared equity initiative is specifically designed for middle-income Australians who have struggled to keep pace with soaring deposit requirements. By allowing eligible participants to enter the market with a deposit of just 2 per cent, the government is effectively acting as a buying partner, contributing up to 40 per cent of the purchase price. As of this week, nearly 2,500 of the 10,000 annual places have already been conditionally or fully approved, highlighting a rapid uptake among first-time buyers and those re-entering the market.
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The Shared Equity Model and Government Contributions
The core of the Help to Buy scheme is a shared equity arrangement where the Australian Government, through Housing Australia, holds a proportional interest in the property. For a newly constructed home, the government may contribute up to 40 per cent of the purchase price, while for an existing dwelling, the contribution is capped at 30 per cent. This structure serves two primary purposes: it drastically reduces the upfront deposit required and lowers the ongoing mortgage repayments by reducing the total loan amount. While the homeowner does not pay rent on the government’s share, they must maintain the property, cover all holding costs like rates and insurance, and provide annual income updates to remain compliant.
Eligibility Thresholds and Financial Requirements
To access this federal support, applicants must meet strict income and residency criteria that target those most in need of a leg up. Currently, individual applicants must have a taxable income of $100,000 or less, while couples or single parents are capped at $160,000 per year. Participation is limited to Australian citizens who do not currently own any other property or land, either in Australia or overseas. A key advantage for those who qualify is the automatic waiver of Lenders Mortgage Insurance, a fee that typically adds thousands of dollars to the cost of a low-deposit loan. This waiver, combined with the 2 per cent deposit requirement, has brought the median entry cost for many participants down to approximately $29,000.
Regional Price Caps and Market Access in 2026
The scheme operates within specific property price caps that vary significantly across states and territories to reflect local market realities. These caps ensure that the initiative remains focused on affordable and entry-level housing rather than luxury estates. In Sydney and regional New South Wales centers like Newcastle and Wollongong, the cap currently sits at $1,300,000, whereas in Melbourne, it is $950,000. It is important to note that Tasmania is still in the process of passing enabling legislation, so the scheme is not yet active there. The table below outlines the current maximum purchase prices for major metropolitan areas.
| State/Territory | Capital City & Regional Centres | Rest of State |
| New South Wales | $1,300,000 | $800,000 |
| Victoria | $950,000 | $650,000 |
| Queensland | $1,000,000 | $700,000 |
| Western Australia | $850,000 | $600,000 |
| South Australia | $900,000 | $500,000 |
| Australian Capital Territory | $1,000,000 | N/A |
| Northern Territory | $600,000 | $600,000 |
Participating Lenders and the Application Path
Currently, the scheme is being spearheaded by major participating lenders, most notably Commonwealth Bank and Bank Australia. While more lenders are expected to join the panel by mid-2026, those looking to apply today must engage directly with a home lending specialist from these institutions. Unlike other federal guarantees, Commonwealth Bank is currently only accepting applications through its in-house channels rather than third-party mortgage brokers. Once a lender assesses an applicant’s financial standing and issues a conditional approval, the buyer has 90 days to find a property and sign a contract of sale, with the option to request a single 90-day extension if needed.
Expert Insight: Practical Application and Long-Term Strategy
For those considering the scheme today, the most critical practical step is understanding the “buy-back” or “staircasing” process. Expert financial planners suggest that while the 2 per cent entry point is attractive, the government’s equity share is not a gift; it is a stake that fluctuates with the property’s value. If you buy a home for $800,000 with a 30 per cent government contribution ($240,000) and the home appreciates to $1,000,000, the cost to buy out the government’s share rises proportionally to $300,000. A savvy strategy is to utilize the lower monthly mortgage repayments to save aggressively, aiming to make voluntary repayments of at least 5 per cent of the property value at a time to slowly reclaim full ownership before a sale is required.
Essential Takeaways for Home Buyers
- Eligible buyers only need a 2 per cent deposit and pay no Lenders Mortgage Insurance.
- The government contributes up to 40 per cent for new builds or 30 per cent for existing homes.
- Income limits are set at $100,000 for individuals and $160,000 for couples or single parents.
- Participation requires maintaining the property as a principal place of residence.
- Equity can be bought back from the government in increments or settled when the property is sold.
