UPDATE-Government expands Help to Buy scheme with higher caps

The federal government is significantly expanding its ‘Help to Buy’ shared equity housing scheme by raising income and property price caps to make homeownership more accessible to Australians.

Under the expanded program, income thresholds will increase from $90,000 to $100,000 for singles and from $120,000 to $160,000 for couples or single parents. 

Property price caps will also see substantial increases, with Sydney’s limit rising from $950,000 to $1.3 million, Brisbane from $700,000 to $1 million, and Melbourne from $850,000 to $950,000.

The scheme allows eligible homebuyers to purchase properties with the government taking a 30 per cent stake in existing homes or 40 per cent in new builds, effectively reducing the deposit and mortgage size needed by purchasers.

Housing Minister Clare O’Neil defended the expansion, which will cost an additional $800 million, bringing the total investment to $6.3 billion. “The changes that we’re making today will expand this scheme to make sure that more young people get more government support for more homes around the country,” Ms O’Neil said.

The government maintains that the original allocation of 40,000 places over four years will remain unchanged. With the adjustments, they claim most first-home buyers will qualify for the program, and approximately two-thirds of properties nationwide will fall under the revised price caps.

Price caps will now be tied to median house prices in each region rather than median dwelling prices, potentially opening up more housing options for participants.

The Help to Buy scheme only passed through parliament late last year after facing significant political opposition, however, it’s yet to be rolled out.

The budget will also include nearly $50 million for states and territories to develop the prefabricated and modular home construction sector, part of the government’s broader housing strategy.

Ms O’Neil said that while building more homes remains central to addressing housing affordability, immediate support for homebuyers is also necessary. “The centre of our response is building more homes because the reason that so many Australians are in housing distress is because we have a housing shortage,” she said. “We’ve got a now $33 billion housing package. Most of that money is going into building more homes.”

*This information is general in nature and does not take into consideration your individual circumstances. Please contact us for further information.