Up to 40,000 low- and middle-income earners will get additional help to buy a home from next year, as the federal government launches its promised Help to Buy scheme.
The states and territories agreed to the shared equity scheme, which was one of the federal government’s 2022 election promises.
Under the Help to Buy scheme, the federal government will contribute up to 40 per cent of the cost of a new home, and 30 per cent for an existing home, to 10,000 eligible buyers per year.
Eligible single people must have an income of no more than $90,000, while couples must have a combined income of no more than $120,000.
There will be price caps placed on the properties the government will support, which vary by state and city.
Prime Minister Anthony Albanese says the government is opening the door of home ownership to tens of thousands of Australians.
“So often these Australians have done all the right things – worked hard, saved up, made sacrifices – but a deposit for a home is still out of reach,” he says.
Proptrack senior economist Paul Ryan says the Help to Buy scheme would be popular with first-home buyers who were struggling to save a deposit.
“The good thing about this policy is that it recognises that the big burden for first-home buyers is saving a deposit,”Mr Ryan says.
“So, the homebuyers who are accepted can jump that hurdle much more easily.”
He says the Help to Buy and home guarantee schemes are better policies than first-home buyer grants and stamp duty concessions, which can contribute to higher home prices.
“These policies are likely to get first-home buyers into their homes sooner,” he says.
The Help to Buy scheme is the latest federal government-supported program to help Australians buy a home. The government says more than 50,000 Australians have already accessed the Home Guarantee Scheme, which includes the First Home Guarantee, the Regional First Home Buyer Guarantee and the Family Home Guarantee.
Mortgage Choice broker Rob Lees says the Help to Buy scheme will help people who are struggling to get into the market.
“It may not be the first choice for first-home buyers as it would be better if they took up the home guarantee scheme, where they own the property and get the benefit of the capital growth, whereas the government will get part of the capital growth benefit through the Help to Buy scheme,” he says.
“There are people who are struggling to save a five per cent deposit, so it’s good to have the option but it’s not the primary option. Homebuyers aren’t going to get the full benefit of the capital growth but they will get the security of their own home and that’s a good thing.”