What Is The Help To Buy Scheme?
The Help to Buy Scheme, introduced by the Australian Labor Party, is a shared equity scheme wherein the government helps Australians purchase a home by contributing up to 40% of the property price for a new home and up to 30% for an existing one. Participants need just a 2% deposit and do not have to pay Lenders Mortgage Insurance. They also do not have to pay rent on the portion of the home the government owns and they can buy out the government’s share when they are able. The scheme is designed to help with the longstanding affordability crisis. There would be 10,000 places available for eligible Australians each year.
When Will It Be Available?
The Help to Buy Scheme is set to commence from July, 2023.Who Is Eligible For The Help To Buy Scheme?
| Criteria | Eligibility Requirements |
|---|---|
| Income | |
| Property ownership and residency | |
| Age and citizenship | |
| Deposit and other expenses | |
| Type of housing | Participants can purchase a new or existing home that is one of the following types:
|
| Other requirements |
How Much Will I Save?
The savings on a property through the scheme will depend on the property’s price. Based on the price cap for different locations, a 40% equity contribution from the government for purchasing a new house can save you anywhere from $120,000 to $380,000. A 30% equity contribution from the government to purchase an established home can save anywhere from $120,000 to $285,000. The chart below shows price caps for properties in different locations and the maximum the government would pay under the scheme, based on the property type.| Region | Property Price Cap | Savings On New Home At Maximum Price | Savings On Existing Home At Maximum Price |
|---|---|---|---|
| NSW – Sydney and regional centres (Newcastle, Lake Macquarie and Illawarra) |
$950,000 | $380,000 | $285,000 |
| NSW – rest of state | $600,000 | $240,000 | $180,000 |
| VIC – Melbourne and regional centre (Geelong) |
$850,000 | $340,000 | $255,000 |
| VIC – rest of state | $550,000 | $220,000 | $165,000 |
| QLD – Brisbane and regional centres (Gold Coast and Sunshine Coast) |
$650,000 | $260,000 | $195,000 |
| QLD – rest of state | $500,000 | $200,000 | $150,000 |
| WA – Perth | $550,000 | $220,000 | $165,000 |
| WA – rest of state | $400,000 | $160,000 | $120,000 |
| SA – Adelaide | $550,000 | $220,000 | $165,000 |
| SA – rest of state | $400,000 | $160,000 | $120,000 |
| TAS – Hobart | $550,000 | $220,000 | $165,000 |
| TAS – rest of state | $400,000 | $160,000 | $120,000 |
| ACT | $600,000 | $240,000 | $180,000 |
| Northern Territory | $550,000 | $220,000 | $165,000 |
Does Help To Buy Allow You To Buy Out The Government’s Stake?
Participants in Help to Buy do not have to pay rent on the portion of the home the government owns. They can also buy out the government’s equity – at least 5% at a time – when they are able.How To Apply For The Help To Buy Scheme
We at Home Loan Experts can assist you with applying for the Help to Buy scheme when the government starts accepting applications for it. Even if you don’t qualify for the scheme, there are other programs for you to choose from, including the following:- If this is your first home, there are other schemes and government grants for home buyers, including the first home guarantee. Here’s a comparison between the Help to Buy and First Home Guarantee Scheme.
- You can apply for a guarantor home loan, which helps you borrow up to 105% of the security’s value. There are also no-deposit and low-deposit home loans available.
