The Help to Buy scheme, explained for WA buyers
For many first home buyers the biggest barrier isn’t servicing a mortgage. It’s saving a deposit large enough to get approved. Help to Buy changes that dynamic by reducing both the upfront deposit and the size of the loan itself.
What is the Help to Buy scheme?
Unlike grants or guarantor-style programs, this is a structured shared equity scheme where the government co-invests in the property alongside you. That means less debt, lower repayments and increased accessibility, but also shared ownership.
The Help to Buy scheme is a federal government initiative legislated under the Help to Buy Bill. It allows eligible buyers to purchase a home with a minimum 2% deposit while the Commonwealth contributes up to 30% to 40% of the purchase price in exchange for an equity share. Rather than borrowing 95% to 98% from a lender, your mortgage is reduced because the government effectively becomes a silent co-owner. You live in the property as the sole occupier, but ownership is split proportionally based on contribution.
The scheme is capped annually, meaning there are limited spots each year. It’s targeted specifically at low-to-middle income earners currently locked out of traditional lending thresholds. The legislative and structural framework is outlined in the federal program documentation on the First Home Buyer’s website.
Not a grant
Remember, this isn’t a grant. It is structured government assisted home buying, and the long-term implications should be assessed accordingly. Figures and price caps change: confirm current eligibility with firsthomebuyers.gov.au and RevenueWA before you rely on them.
How shared equity works
Under the scheme you contribute a minimum 2% deposit, take a home loan from a participating lender, and the government contributes up to 40% for a new home or up to 30% for an existing home. The percentage contributed becomes the government’s ownership share.
| On a $600,000 new home | Value | The government’s 40% share |
|---|---|---|
| At purchase | $600,000 | $240,000 |
| If the property rises in value | $700,000 | $280,000 |
| If the property falls in value | Lower | Decreases proportionally |
You can buy back the government’s share over time, subject to minimum equity redemption thresholds, which lets you transition toward full ownership as your financial position improves. The key advantage is debt reduction; the key trade-off is shared capital growth.
Current eligibility criteria
The passage of the Help to Buy Bill formally enabled the Commonwealth to participate in residential property purchases through equity. The scheme is nationally administered but limited by annual participation caps, so eligibility does not guarantee placement.
| Criterion | Requirement |
|---|---|
| Income cap, singles | $90,000 |
| Income cap, couples | $120,000 combined |
| Minimum deposit | 2% |
| Government contribution, new build | Up to 40% |
| Government contribution, existing home | Up to 30% |
| Citizenship | Must be an Australian citizen |
| Age | At least 18 years old |
| Occupancy | Must intend to occupy the property as an owner-occupier |
| Other property | Must not own any other property at the time of purchase |
| Places | Capped each year, so eligibility does not guarantee a place |
These caps are designed to target genuine first home buyers as opposed to investors or higher-income earners.
Help to Buy in WA, and the price caps that decide it
Strict property price caps apply by state and region: metropolitan caps differ from regional caps, and exceeding the threshold makes the property ineligible regardless of income eligibility.
The Help to Buy scheme in WA follows the federal framework but applies Western Australia-specific price limits. Metropolitan Perth caps differ from regional WA limits, so buyers need to weigh suburb selection and build specifications carefully to remain compliant. WA implementation details are outlined through RevenueWA.
If you’re considering a custom build or house and land package, the combined land and build contract must fall within the applicable cap. The scheme may influence your decisions on block size, build inclusions, specification level and location, and understanding those constraints early minimises contractual risk.
Help to Buy vs the Family Home Guarantee
The Family Home Guarantee is a separate initiative, often confused with Help to Buy because both allow a 2% deposit. Structurally they are very different: Help to Buy reduces your loan size, the Family Home Guarantee reduces the deposit barrier.
| Help to Buy | Family Home Guarantee | |
|---|---|---|
| What the government does | Contributes funds and takes an equity share | Guarantees a portion of your loan. Contributes no funds, takes no equity |
| Minimum deposit | 2% | 2% |
| Lenders Mortgage Insurance | Reduced LVR can lower or remove it, depending on the lender | Waived, because the loan is guaranteed |
| Who owns the home | Shared with the government | Ownership remains entirely with the purchaser |
| The problem it solves | Reduces your loan size | Reduces the deposit barrier |
Both are government housing schemes, but they solve different financial challenges. You have to decide whether lower debt through shared equity, or full ownership with higher leverage, is more appropriate for your long-term plans.
Help to Buy vs the First Home Guarantee (5% deposit)
Both aim to make home ownership more accessible, but they operate in fundamentally different ways, and that affects both short- and long-term financial outcomes.
| Help to Buy | First Home Guarantee | |
|---|---|---|
| Government role | Contributes capital and becomes a proportional co-owner | Guarantees a portion of your loan to the lender. Contributes no capital |
| Typical deposit | 2% | 5% |
| Mortgage size | Smaller, because the government funds part of the purchase | Larger, because you borrow the full balance |
| Monthly repayments | Lower | Higher |
| Capital growth | Shared with the government in proportion to its equity | You retain 100% of any increase |
| Capital loss | Also shared, reducing your exposure to the downside | You bear 100% of any decline |
| Lenders Mortgage Insurance | Shared equity reduces the LVR, which can lower or eliminate LMI depending on lender policy | The guarantee lets you avoid LMI even with a 5% deposit |
| Path to full ownership | Equity must eventually be repurchased, which may take years | No government equity buyback required |
The choice is a trade-off. Help to Buy lowers debt and monthly repayments but involves shared ownership. The First Home Guarantee preserves full ownership but requires higher leverage and exposes you fully to market fluctuations. Help to Buy is the more conservative option on debt exposure and serviceability risk, but it may be less lucrative in a high-growth market. Read the First Home Guarantee guide.
Why is this scheme a big deal for first home buyers?
Help to Buy addresses the two largest barriers for first-time buyers: the size of the deposit and the serviceability of the mortgage. By requiring only a 2% deposit, the scheme significantly shortens the time to home ownership.
| Deposit on a $600,000 property | Cash needed |
|---|---|
| 20% deposit | $120,000 |
| 5% deposit | $30,000 |
| 2% deposit | $12,000 |
Reduced loan size and monthly repayments
Because the government contributes up to 40% of the purchase price on a new home (30% for existing), your mortgage is significantly smaller. That means lower monthly repayments, less interest over the life of the loan, easier serviceability for moderate-income buyers, and less vulnerability to interest rate rises. The smaller debt load can also improve the likelihood of loan approval for buyers previously constrained by borrowing capacity.
Access to homes that are otherwise unaffordable
Lower debt and smaller repayments mean you may qualify for homes that would otherwise exceed lending thresholds. Access is limited by the regional price caps, and in Perth median prices vary significantly between suburbs, so selecting a property within the cap is critical. The scheme also lets buyers consider higher-quality builds or slightly larger homes within their approved parameters.
How is this scheme expected to affect the property market?
Help to Buy is likely to influence the market primarily at the entry-level segment, without fundamentally altering broader housing dynamics. In the short term it’s expected to increase demand in price brackets within the scheme’s caps, particularly in metropolitan areas like Perth where competition among first-time buyers is already high. That is likely to drive greater uptake of new builds and house and land packages meeting both federal and state criteria, and may accelerate price growth slightly in compliant suburbs.
Over the medium to long term the scheme can improve market participation for first-time buyers who might otherwise remain renting, potentially contributing to more stability in entry-level rental markets. Builders and developers may respond by focusing on homes falling within the price caps. Because participation is limited by both income and location, the scheme is unlikely to overheat the broader property market.
Eligibility checklist
To participate in the Help to Buy scheme, buyers must satisfy several criteria:
- Your annual earnings must be within the income caps set out in the eligibility table above
- Buyers must be Australian citizens and at least 18 years old
- Applicants must not already own a residential property
- The property must be intended as the primary residence. Rental or investment plans make you ineligible
- Homes must fall within the federal and state price caps, which vary by location and metropolitan versus regional designation
- The scheme has a capped number of places each year, so pre-approval and fully documented finances improve your chance of securing a spot
Planning around these requirements early avoids delays or ineligibility. Selecting a home within the appropriate price cap, or timing your purchase to coincide with annual allocation windows, can be the decisive factor.
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