The highly anticipated Help to Buy Scheme will kick off next year, giving more Aussies a chance to score their dream home. Looking to buy a home? Today we’ll unpack how the new federal government scheme will work, who it’ll benefit, and the fine print you need to know.
A key election promise of the Albanese government, Help to Buy is a shared equity scheme aimed at helping 40,000 low and middle-income earners buy a place of their own (10,000 allocations per year).
The scheme involves the government making an equity contribution worth up to 40% of the value of a new home, or 30% of the value of an established home.
But that doesn’t mean Anthony Albanese will be rocking up unannounced to claim the guest bedroom, as we’ll explain further below.
Homebuyers need a minimum 2% deposit, and must be able to qualify for a home loan with a participating lender to fund the balance of the purchase. No lenders mortgage insurance is payable.
Homebuyers can choose to boost their stake in the property at any time, and the government won’t charge rent on its share of the home.
Further reading: Buying a House Through Government Scheme – What You Need to Know
Who is eligible for Help to Buy?
Help to Buy is not limited to first homebuyers.
You do need to be an Australian citizen, and you can’t currently own your home or have a share in a residential home.
Income limits apply too. Singles can earn up to $90,000 annually, or up to $120,000 for couples.
Help to Buy property price limits
Property price limits apply for Help to Buy across state capitals, regional centres and ‘rest of state’ areas. The price caps are shown below.
NSW capital city and regional centres: $950,000
Rest of state: $600,000
VIC capital city and regional centres: $850,000
Rest of state: $550,000
QLD capital city and regional centres: $650,000
Rest of state: $500,000
WA capital city and regional centres: $550,000
Rest of state: $400,000
SA capital city and regional centres: $550,000
Rest of state: $400,000
TAS capital city and regional centres: $550,000
Rest of state: $400,000
ACT: $600,000
NT: $550,000
Regional centres are Newcastle and Lake Macquarie, Illawarra, Central Coast, North Coast of NSW, Geelong, Gold Coast and Sunshine Coast.
How much can I save with Help to Buy?
Under Help to Buy, homebuyers can take out a much smaller home loan. This provides valuable savings in loan repayments and interest costs.
The federal government estimates homebuyers can save up to $380,000 on a new home purchased through the scheme, or as much as $285,000 on an established home.
The fine print to be aware of
For low and middle-income earners struggling to buy a home, Help to Buy may be a game-changer.
But before you rush in, bear in mind that the scheme will see you share a stake in your home with the government.
So if or when you decide to sell the property, the federal government will put its hand out for a slice of the sale proceeds.
In this way, you won’t get the full benefit of the property’s long-term price growth, but rather a share of the profits in line with the proportion of ownership you hold.
Now’s the time to start planning
With Help to Buy due to launch next year, now’s the time to start planning.
If it’s something you might be interested in, don’t delay reaching out to Soho Home Loans to find out more – it’s bound to be popular, and places are limited, so you’ll want to start preparing now.
FAQs on the Rent to Buy Scheme
Who is eligible for the Help to Buy scheme Australia?
To be eligible for the Help to Buy scheme Australia, you must be:
- An Australian citizen or permanent resident
- At least 18 years old
- Have a combined income of less than \$120,000 for couples or \$90,000 for singles
- Live in the purchased home
- Do not own any other land or property in Australia or overseas
What is the home guarantee scheme for 2024? The Home Guarantee Scheme is a government program that helps first-home buyers purchase a home with a smaller deposit.
The scheme provides eligible buyers with an equity guarantee from the government, which means that the government will share some of the financial risk if the buyer defaults on their loan.
In 2024, the Home Guarantee Scheme will offer two guarantees:
- The First Home Guarantee: This guarantee is available to eligible first-home buyers who have a deposit of at least 5%. The government will guarantee up to 40% of the purchase price of the home, so the buyer will only need to borrow 5% to 60% of the purchase price.
- The Family Home Guarantee: This guarantee is available to eligible first-home buyers who are single parents or couples with dependent children. The government will guarantee up to 30% of the purchase price of the home, so the buyer will only need to borrow 70% to 100% of the purchase price.
What is the help to buy scheme in Tasmania 2023?
The Help to Buy Scheme in Tasmania is a government program that helps first-home buyers purchase a home with a smaller deposit. The scheme provides eligible buyers with a grant of $5,000, which can be used towards the purchase of a new or existing home.
To be eligible for the Help to Buy Scheme in Tasmania, you must:
- Be a Tasmanian resident
- Be a first-home buyer
- Have a combined household income of less than \$125,000
- Purchase a home that is valued at less than \$600,000
What is the $5,000 grant in Tasmania?
The $5,000 grant is a government program that provides financial assistance to first-home buyers who purchase a new or existing home in Tasmania. The grant is available to eligible buyers who have a combined household income of less than $125,000 and purchase a home that is valued at less than $600,000.
What is the 2 deposit scheme in Tasmania?
The 2 deposit scheme is a government program that helps first-home buyers purchase a home with a smaller deposit. The scheme provides eligible buyers with a loan of up to 80% of the purchase price of the home, so the buyer will only need to save a 20% deposit.
To be eligible for the 2 deposit scheme in Tasmania, you must:
- Be a Tasmanian resident
- Be a first-home buyer
- Have a combined household income of less than \$125,000
- Purchase a home that is valued at less than \$600,000
