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Summary of Labor’s Help to Buy Schemes for First Home Buyers


Schemes for first home buyers

Schemes for first home buyers were introduced by the Australian Labor Party as a way of tackling the housing affordability crisis. The Scheme is one of shared equity and works by splitting the property’s equity between the buyer and the government with the latter contributing up to 40% of the property price where new homes are concerned and up to 30% for existing properties. The objective is to increase the rate of buyers through schemes for first home buyers.


Schemes for First Home Buyers example



It has been proposed that each year, 10,000 places in the Scheme will be available for eligible Australians. 

The key benefits of the Scheme include: 

  • Buyers can purchase sooner, which mitigates the risk of housing prices rising before they can save a large enough deposit; and 
  • The government will not charge fees or interest on their portion of the loan, so it will not be impacted by interest rate rises. 


When does the Help to Buy Scheme commence?

The Help to Buy Scheme kicks off on 1 January 2023.  


How much can I save by using the Schemes for First Home Buyers? 


Every buyer’s situation is different, and the true savings will be dependent upon the property price, however, with participants needing to have just a 2% deposit the up-front savings could be in the tens of thousands of dollars.  

Participants in the scheme will also be exempt from Lenders Mortgage Insurance, which is usually applicable on loans where a deposit of less than 20% is available. Lenders Mortgage Insurance is an up-front cost and not having to pay for this insurance can save the buyer in the tens of thousands. 




Who is eligible for the Help to Buy Scheme? 

Eligibility for the Help to Buy Scheme relies on the satisfaction of a number of factors, including: 

  • Australian citizenship (permanent residents are not eligible); 
  • Earnings per year of less than $90,000 per individual and $120,000 per couple; 
  • No previous ownership or part-ownership of property; and 
  • Serviceability of and approval for a home loan 

The full range of criteria should be considered before an application for the Scheme is made. 


What else do I need to know about the Schemes for First Home Buyers? 


Prospective buyers who wish to take advantage of the Help to Buy Scheme should be aware that they can only borrow against the property price. Buyers must also have the funds to pay for stamp duty and other costs associated with purchasing property (such as legal fees and mortgage fees). Buyers should also be aware that ongoing costs relating to the property (including council rates and/or strata levies) are theirs alone and will not be subsidised by the government despite its equity share. 




If the buyer has paid down their loan and finds themselves in a position to do so, they may buy out the government’s share of the property. The buyer’s stake can be increased by a minimum of 5% each time until the 40% share has been absorbed by the buyer. If the buyers experience an increase in their income while the government still shares equity in their property, they will be expected to increase their stake if it is viable to do so. 

By Lauren Eakins

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