The Help to Buy scheme is a shared equity program that helps eligible low and middle-income Australians buy homes with a much smaller deposit. Under the scheme, the government can contribute up to 30% of the purchase price for an existing home or up to 40% for a new home, helping Australians enter the property market sooner while avoiding the need for lenders' mortgage insurance (LMI).

The scheme has (pretty strict depending on where you live) eligibility requirements: participants must be Australian citizens aged 18 or over, with annual taxable income under $90,000 for singles or $120,000 for couples. They must not own any other property, must live in the purchased home as their principal residence, and need to provide a minimum 2% deposit.

Housing Australia manages this program alongside participating lenders, with systems in place to protect both homeowners and the government's investment. Homeowners can make voluntary repayments to increase their equity share at any time, and can make improvements to their property (over $20,000) without the government benefiting from the added value. The program includes special provisions for single parents and has specific systems for handling hardship cases.

Help to buy had some challenges getting through, summarised here courtesy of The Daily Aus:

"Bills need to pass both the House of Representatives and the Senate to become law. The Government doesn’t have a majority in the Senate.

The Coalition voted against the scheme, meaning the Government needed support from the Greens and a handful of crossbenchers to pass the bill.

The Greens voted against the proposal in the House of Reps, arguing the 40,000-buyer cap would create a “housing lottery” and pit prospective home owners against each other.

[…]

Housing Minister Clare O’Neil said the Greens had folded after “a year of delay and blocking” the bill, which she called a “bold and ambitious” housing reform.

“I’m really pleased that the Greens have finally seen the light,” O’Neil said.

The bill has now passed the Senate, meaning the scheme can be set up once the Governor-General formally signs it into law."

You may be wondering: "But won't it increase demand and house prices?"

According to the Grattan institute - yes, but only by 0.016% [3]

BUDGET 2025-26 UPDATE:

The Expanded Help to Buy Scheme

The Albanese Labor government has significantly expanded its signature Help to Buy scheme in the 2025 Budget, increasing both income and property price caps to make home ownership accessible to more Australians.

The $6.3 billion scheme allows eligible first home buyers to purchase property with the Commonwealth providing 30% of the purchase price for existing homes or 40% for new homes. Buyers need only a 2% deposit, significantly reducing the time needed to save and lowering monthly mortgage repayments by hundreds of dollars. The scheme will assist 40,000 Australians over four years at 10,000 places annually, with applications opening in late 2025.

Key changes in the 2025 Budget include increasing income caps from $90,000 to $100,000 for singles and from $120,000 to $160,000 for joint applicants and single parents. Property price caps have been substantially raised to reflect average house prices in each location - in Sydney the cap is now $1.3 million, Brisbane $1 million, and Melbourne $950,000.

• The expanded scheme will save eligible buyers approximately $900 per month on existing properties and $1,200 per month on new builds

• An additional $800 million has been allocated, bringing total investment to $6.3 billion

• The government has also committed $54 million to accelerate prefabricated and modular home construction

[1] https://www.theguardian.com/australia-news/2025/mar/22/changes-in-help-to-buy-housing-scheme-will-make-most-first-home-buyers-eligible-labor-says

[1] https://treasury.gov.au/sites/default/files/2024-04/c2024-491046-es.pdf

[2] https://thedailyaus.com.au/economics/help-to-buy-will-roll-out-nationally-after-greens-labor-deadlock

[3] https://grattan.edu.au/news/why-help-to-buy-is-a-good-idea/#:~:text=We%20estimate%20that%20after%20four,homes%20eligible%20for%20the%20scheme.