Help to Buy Scheme Australia: Government Co-Owns Your Home, 2% Deposit

What is Help to Buy?

Help to Buy is Australia’s federal government shared equity scheme, launched on 5 December 2025. Instead of borrowing the full purchase price yourself, the government co-owns part of your home — reducing the amount you need to borrow, lowering your monthly repayments, and eliminating the need for Lenders Mortgage Insurance (LMI) even with a very small deposit.

This is not a grant: the government does not give you money. It becomes a co-owner and will recover its share when you sell (at market value at the time), or you can voluntarily buy back the government’s equity stake over time.

New builds: the government contributes up to 40% of the purchase price.
Existing homes: the government contributes up to 30%.

You need a minimum 2% deposit from your own savings. Your bank loan covers the rest. Because the government holds a large share, LMI is not required — saving tens of thousands of dollars.

Example: a $600,000 home with a 30% government contribution means the government’s share is $180,000. You need a 2% deposit of $12,000 and borrow $408,000 from a lender.

Who is eligible?

Income limits:

Individual applicants: up to $100,000 per year (based on ATO Notice of Assessment from the previous year).
Couples or single parents: up to $160,000 combined per year.

Property ownership:

Must not currently own any property in Australia or overseas.
Not limited to first home buyers — people who have previously owned a home but do not currently own one can apply.

Use of property:

Must live in the home as your principal place of residence — investment properties are not eligible.

Residency:

Australian citizens or eligible permanent residents.

How many places are available?

The scheme offers 10,000 places per year over four years (to 2029). As of early 2026, around 2,300 places had been approved and 278 households had completed purchases — places remain available, but demand is expected to rise as more lenders join.

Which lenders participate?

As of early 2026, only Commonwealth Bank and Bank Australia offer home loans under the scheme. This is a notable constraint — your mortgage options and interest rates are limited. More lenders are expected to join during 2026, which should increase competition.

What happens when you sell?

When you sell, the government recovers its proportional equity share at the current market value — not the original dollar amount it contributed. If the property has risen in value, the government shares in that gain; if it has fallen, both parties share the loss.

You can also buy back the government’s share voluntarily over time (typically in increments of 5%) without selling the property — increasing your outright ownership progressively.

Key considerations

Only two lenders: limited mortgage choice — compare rates and conditions carefully.
Not for investment: you must live in the property. Renting out the whole property is not permitted.
When you sell: proceeds are split proportionally — you receive your share, the government receives theirs.
Price caps by state: there are maximum property price limits for each state and territory — check the Housing Australia website for the current caps in your area.
No negative gearing: since the government co-owns the property, standard investment tax strategies do not apply.

How to apply

Check your eligibility at firsthomebuyers.gov.au or the Housing Australia website.
Contact one of the two participating lenders (CBA or Bank Australia) for pre-approval.
Find a property that falls within the price cap for your state.
Submit your application through the lender — they coordinate with Housing Australia.

This article is a general overview; scheme conditions and processes may change. Always check the Housing Australia website and speak with a mortgage broker or financial adviser before making a decision.