Help to Buy Scheme 2026: How Shared Equity Works

The Help to Buy Scheme is an Australian Government shared-equity arrangement that helps eligible buyers purchase a home with a smaller deposit and home loan. The government contributes part of the purchase price and shares in the home’s changing value until its share is repaid.

Buyers need at least a 2% deposit. The government can contribute up to 30% for an existing home or 40% for a new home. You own the property title, but selling or buying back the government’s share means paying an amount based on the property’s value then.

Explain Help to Buy in One Answer

Help to Buy fills the funding gap between what an eligible buyer can contribute, what a participating lender can lend and the purchase price. The contribution is an interest-free loan secured by a second mortgage, with repayment tied to the government’s equity share. It isn’t a grant you keep permanently or a guarantee backing an ordinary home loan.

As at 3 October 2026, the official Help to Buy page says the scheme is available in all states and territories. Applications go through participating lenders. Its annual allocation is 10,000 places, so availability doesn’t mean every applicant has a reserved place.

Housing Australia’s 28 November 2025 launch announcement confirms the scheme started on 5 December 2025. Older articles asking when it will start, including 2023 and 2024 announcements, describe an earlier stage. Use the current scheme settings for a 2026 purchase.

The ownership difference helps explain which government support fits a buyer’s plans.

Question	Help to Buy	Australian Government 5% Deposit Scheme
What does the government provide?	Money towards the purchase in exchange for a contractual equity share	A guarantee to the lender
Does the government share future property gains?	Yes, according to its remaining equity percentage	The guarantee gives the government no equity share
What must the buyer repay?	The lender’s loan and the government’s value-based share under the scheme terms	The full home loan, with the buyer responsible for repayments

The 5% Deposit Scheme guide explains the guarantee route. The official 5% Deposit Scheme page describes the guarantee and the buyer’s repayment responsibility, as at October 2026.

Show How the Shared-Equity Structure Works

The purchase price is funded by your deposit, the participating lender’s loan and the government contribution. The maximum government percentage is a ceiling. The financial capacity assessment determines the support needed and requires you to contribute what you can reasonably afford.

These fictional examples assume an eligible $600,000 property below its location’s cap, with a valuation matching the price. Each assumes the buyer can contribute only the minimum deposit and qualifies for the maximum government share. Purchase costs are extra.

Funding source	Existing home	New home
Buyer’s 2% deposit	$12,000	$12,000
Government contribution	$180,000 (30%)	$240,000 (40%)
Participating lender’s loan	$408,000 (68%)	$348,000 (58%)
Total purchase price	$600,000	$600,000

An eligible buyer who needs a smaller contribution receives less government support. A 2% deposit and maximum contribution aren’t automatic entitlements. The Help to Buy customer guide, explains the financial capacity assessment and contribution structure.

You make scheduled repayments on the lender’s home loan. You pay no interest or rent to the government and make no monthly government repayments. Separate buyback payments reduce its equity percentage.

In the existing-home example, the government starts with a 30% share worth $180,000. If the home later has a repayment valuation of $750,000 and that share remains unchanged, buying it back costs $225,000 before costs. At a $500,000 repayment valuation, the same share is $150,000.

Paying down the $408,000 home loan doesn’t itself reduce the government’s 30% share. A government buyback is a separate transaction. Approved improvements can change how the share is calculated, and sale rules use the greater of the sale price or valuation.

Summarise Property and Location Rules

Help to Buy supports eligible new and existing homes that you will live in, subject to the property’s location-specific price cap. Houses, townhouses, apartments, units and duplexes can qualify. Vacant land for a new home needs an eligible building contract, so purchasing land alone doesn’t meet that route.

Help to Buy in Victoria, New South Wales, Queensland, Western Australia or Tasmania means the national scheme operating in that location. The same applies in South Australia, the Australian Capital Territory and the Northern Territory. Separate state shared-equity programmes have their own terms.

Enter the property’s location in the official Help to Buy price-cap tool. It gives the current location limit. For a new build, assess the land and building costs together against the scheme’s applicable cap.

Help to Buy doesn’t pay your stamp duty or other purchase costs. First home owner grants and stamp duty concessions can still apply when you meet their separate rules. The government contribution doesn’t create a stamp duty exemption by itself.

Check Eligibility Before Applying

A Help to Buy eligibility screen checks your personal circumstances and finances as well as the property you intend to buy. The categories include citizenship and age, taxable income, deposit capacity, property ownership, other government assistance and living in the home. Single parents have specific provisions within those categories.

The Help to Buy eligibility guide sets out the complete conditions and supporting evidence. Help to Buy also supports eligible people returning to home ownership, so the words “first home buyer” don’t describe everyone it can help.

A positive preliminary screen doesn’t approve the mortgage or reserve a place. The participating lender separately assesses loan serviceability, meaning whether the buyer can meet repayments after expenses and other debts. Housing Australia’s conditional approval reserves a scheme place, while final approval depends on the property and remaining requirements.

A broker can use Bulma’s Policy Advisor to check the lender’s evidence requirements and retain the quoted policy wording in file notes. That supports the lender-policy check. It doesn’t replace the lender’s credit decision or Housing Australia’s scheme approval.

Follow the Application Route

A participating lender assesses the buyer and submits the Help to Buy application to Housing Australia. You can’t apply directly to Housing Australia. The lender also arranges the home loan needed alongside the government contribution.

The route moves from an eligibility and financial assessment to conditional approval, then a qualifying property purchase and final approval. At settlement, the buyer signs the scheme documents and Housing Australia’s second mortgage secures the government contribution.

Use the Help to Buy application guide for participating lenders, application evidence, approval stages and settlement steps. Keep a preliminary affordability estimate separate from the lender’s approval and the scheme’s reserved place before relying on a purchase budget.

Understand Ongoing Obligations and Exit

Help to Buy participants must keep living in the home and meet the scheme’s ongoing requirements until they exit. They must maintain and insure it, respond to reviews and notify Housing Australia of relevant changes. The General Terms govern these obligations and repayment events.

Living in the Home and Reviews

The home must remain your principal place of residence, subject to the scheme’s permitted exceptions. Turning it into an investment property isn’t an ordinary option under Help to Buy. Changes to ownership or living arrangements can trigger a review.

Housing Australia checks insurance each year and reviews taxable income at least once every five years. It can review earlier when circumstances change. Income above the indexed threshold for two consecutive financial years can lead to an assessment of your capacity to repay some or all of the government share.

An income increase doesn’t mean an automatic demand to repay the whole share immediately. The lender assesses financial capacity under the terms. If the buyer can’t afford a repayment, the scheme provides for later reassessment and hardship support.

Buying Back Equity and Refinancing

You can repay the government’s full remaining share or make a qualifying partial buyback. Under clause 8.2 of the General Terms, a partial voluntary payment must reduce its share by at least five percentage points. The terms apply rounding to the nearest $1,000 and require a current valuation.

For the fictional home valued at $750,000, a $37,500 buyback would purchase five percentage points before the terms’ rounding and transaction costs. If the government held 30%, a completed five-percentage-point buyback leaves it with 25%. This is a share of the whole property, not 5% of the government’s original contribution.

You pay valuation and applicable transaction costs. Refinancing with a participating lender can fund a partial or full buyback under the scheme rules. Moving to a non-participating lender requires repayment of the whole government share.

Refinancing needs the required lender and Housing Australia approvals. Paying off the lender’s mortgage alone doesn’t discharge the government’s share. Notify Housing Australia before refinancing and when the home loan is paid off.

Improvements and Selling

Notify Housing Australia before improvements that meet its notification rules, including work requiring council approval. The valuation process can adjust the government’s percentage so you retain the value added by qualifying improvements. Unnotified work doesn’t receive that adjustment.

You can sell while participating, but you must notify the lender and Housing Australia. The sale must be at arm’s length, and the government’s repayment uses its remaining percentage of the greater of the sale price or current valuation. You also pay the sale and valuation costs.

Sale proceeds repay the lender first, then Housing Australia’s share, then other parties with a legal claim. You receive the remaining balance. A lower sale price doesn’t remove the lender debt, so shared losses don’t guarantee that you recover your deposit.

Help to Buy can suit a buyer whose affordable loan and savings fall short of a suitable home’s price. Its cost is sharing future value and accepting ongoing obligations. Before entering, compare that trade-off with keeping all future equity under a guarantee-backed loan, then work through the eligibility screen for the route you choose.