The highly anticipated Help to Buy Scheme will kick off next year, giving more Aussies a chance to score their dream home. Today we’ll unpack how the new federal government scheme will work, who it’ll benefit, and the fine print you need to know.
A key election promise of the Albanese government, Help to Buy is a shared equity scheme aimed at helping 40,000 low and middle-income earners buy a place of their own (10,000 allocations per year).
The scheme involves the government making an equity contribution worth up to 40% of the value of a new home, or 30% of the value of an established home.
But that doesn’t mean Anthony Albanese will be rocking up unannounced to claim the guest bedroom, as we’ll explain further below.
Homebuyers need a minimum 2% deposit, and must be able to qualify for a home loan with a participating lender to fund the balance of the purchase. No lenders mortgage insurance is payable.
Homebuyers can choose to boost their stake in the property at any time, and the government won’t charge rent on its share of the home.
Who is eligible for Help to Buy?
Help to Buy is not limited to first homebuyers.
You do need to be an Australian citizen, and you can’t currently own your home or have a share in a residential home.
Income limits apply too. Singles can earn up to $90,000 annually, or up to $120,000 for couples.
Help to Buy property price limits
Property price limits apply for Help to Buy across state capitals, regional centres and ‘rest of state’ areas. The price caps are shown below.
NSW capital city and regional centres: $950,000
Rest of state: $600,000
VIC capital city and regional centres: $850,000
Rest of state: $550,000
QLD capital city and regional centres: $650,000
Rest of state: $500,000
WA capital city and regional centres: $550,000
Rest of state: $400,000
SA capital city and regional centres: $550,000
Rest of state: $400,000
TAS capital city and regional centres: $550,000
Rest of state: $400,000
ACT: $600,000
NT: $550,000
Regional centres are Newcastle and Lake Macquarie, Illawarra, Central Coast, North Coast of NSW, Geelong, Gold Coast and Sunshine Coast.
How much can I save with Help to Buy?
Under Help to Buy, homebuyers can take out a much smaller home loan. This provides valuable savings in loan repayments and interest costs.
The federal government estimates homebuyers can save up to $380,000 on a new home purchased through the scheme, or as much as $285,000 on an established home.
The fine print to be aware of
For low and middle-income earners struggling to buy a home, Help to Buy may be a game-changer.
But before you rush in, bear in mind that the scheme will see you share a stake in your home with the government.
So if or when you decide to sell the property, the federal government will put its hand out for a slice of the sale proceeds.
In this way, you won’t get the full benefit of the property’s long-term price growth, but rather a share of the profits in line with the proportion of ownership you hold.
Now’s the time to start planning
With Help to Buy due to launch next year, now’s the time to start planning.
If it’s something you might be interested in, don’t delay reaching out to us to find out more – it’s bound to be popular, and places are limited, so you’ll want to start preparing now.
Ollie Hooper – Mortgage Broker (Stax Home Loans) m: 0401 032 868
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