Key changes include lifting income thresholds and property price caps - moves that will open the door to more homes under the shared equity scheme. 

See also: What is the Help to Buy scheme?

Previously, single applicants needed to earn less than $90,000 per year and couples less than $120,000 to qualify.

Those income thresholds have now been bumped to $100,000 and $160,000 respectively.

Property price caps have also been increased, with most now aligned with median house prices in each region.

However, in high-cost markets like Sydney and regional NSW centres, price caps still fall short of median property values as eligible buyers would struggle to service a mortgage on a median priced home.

New property price caps for the Help to Buy scheme

State Region New price cap
NSW Capital city
and regional centre		 $1,300,000
Elsewhere $800,000
Victoria Capital city
and regional centre		 $950,000
Elsewhere $650,000
Queensland Capital city
and regional centre		 $1,000,000
Elsewhere $700,000
Western Australia Capital city $850,000
Elsewhere $600,000
South Australia Capital city $900,000
Elsewhere $500,000
Tasmania Capital city $700,000
Elsewhere $550,000
ACT $1,000,000
Northern Territory $600,000
Jervis Bay Territory
and Norfolk Island		 $550,000
Christmas Island
and Cocos (Keeling) Islands		 $400,000

Help to Buy expected to launch in 2025

The scheme, which passed through federal parliament in November, still lacks an official start date, with the government anticipating a 2025 launch.

When it does open, it will allow eligible buyers to purchase a home with as little as a 2% deposit, with the government contributing up to 30% of the cost for existing homes or 40% for new builds.

That would allow them to purchase homes they otherwise wouldn't be able to due limitations in mortgage serviceability.

See also: Borrowing Power Calculator

When they sell, a buyer would need to provide the government with a portion of the sale proceeds, equivalent to its stake in the property at the time of sale.

In the meantime, a buyer can choose to repay the government's contribution.

"We've got a generation of young people in this country who feel that homeownership is out of reach for them, and our government is trying to change that," minister for housing Clare O'Neil said.

"These changes mean over 5 million properties will now fall under the new price caps, giving first home buyers more choice in a tough market."

The Help to Buy program is a key pillar of Labor's housing policy.

It stands in contrast to the Coalition's proposal to allow first home buyers to tap up to $50,000 of their superannuation to fund a deposit.

Image by Christopher Burns on Unsplash

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