The government contributes up to 40% of the price and takes an equity share — cutting your loan and repayments dramatically. Who it suits.
Help to Buy is the federal government's shared equity scheme: the Commonwealth contributes a large chunk of your purchase price in exchange for an equity share in your home. It's a fundamentally different tool from the First Home Guarantee — and suits a different buyer.
How Shared Equity Works
Under Help to Buy, the government contributes:
- Up to 40% of the price for a new home
- Up to 30% for an existing home
You need as little as a 2% deposit, and you only borrow the remainder. On a $700,000 existing home with the maximum 30% contribution, you'd borrow around $476,000 instead of $686,000 — cutting repayments by roughly a third.
The government owns its percentage as equity. You don't pay rent or interest on their share, but when you sell (or buy them out), they receive their percentage of the then-current value — sharing in any growth.
Eligibility Essentials
- Income caps apply (unlike the FHBG): around $100,000 for singles and $160,000 for joint applicants
- You must not currently own property in Australia
- Owner-occupiers only, with regional/city price caps
- Limited places are allocated each year
Buying Back the Government's Share
You can "staircase" — buy back the government's equity in increments (minimum 5%) as your finances improve, at the property's market value at that time. Many participants refinance to buy out the share entirely once their income and equity grow.
Help to Buy vs. First Home Guarantee
| Help to Buy | First Home Guarantee | |
|---|---|---|
| Government role | Owns equity share | Guarantees your loan |
| Deposit needed | From 2% | 5% |
| Income caps | Yes | No |
| Shares in your capital growth | Yes | No |
| Places | Limited annually | Uncapped |
Rule of thumb: if you can qualify for the FHBG and service the full loan, it's usually the better long-term deal because you keep 100% of growth. Help to Buy shines for lower-income buyers who couldn't service a full loan at all — a smaller share of a growing asset beats renting forever.
The Long-Term Maths of Sharing Equity
The government's share is of your property's value, not a fixed debt — so it grows with the market. Take a $700,000 existing home with a 30% ($210,000) contribution: if the property reaches $900,000 in eight years, buying out the share then costs $270,000. You "paid" $60,000 for eight years of ownership you otherwise couldn't have had — while your own 70% share grew $140,000 and your loan shrank. Compare that against renting the same home for eight years, and shared equity wins clearly; compare it against a full loan you could genuinely service, and keeping 100% of growth wins. That's the fork in the road, and it's why eligibility for the First Home Guarantee should always be checked first.
Staircasing Strategy
Buying back in 5% increments works best when timed around valuations, income growth and rate cycles — each buy-back typically requires a refinance or restructure, so bundling increments (10–15% at a time) usually beats annual nibbles on fees. Many participants target a full buyout via refinance once their income clears the caps and their equity supports it; we map this exit path at the start, not as an afterthought.
Where to Verify Details
Scheme settings — income caps, price caps, place allocations and application windows — are administered federally through Housing Australia with applications via participating lenders, and the caps adjust over time. Because places are limited each financial year (unlike the now-uncapped FHBG), timing your application matters. If Help to Buy looks like your path, a free assessment confirms your eligibility across every scheme simultaneously — FHBG, Help to Buy, FHSSS and NSW's duty concessions — so you land on the strongest combination rather than the first one you heard of.
Who Help to Buy Genuinely Suits
Profile it honestly. The scheme shines for: single parents and single-income households whose serviceability caps a full loan below realistic Sydney prices; older first-time buyers with modest super runway who benefit more from housing security than maximised equity; and key workers anchored to areas priced beyond their solo capacity. It suits poorly: buyers whose income will likely spike past the caps quickly (forced buy-back at market value negates the benefit), and anyone who can already service a full loan under the First Home Guarantee — surrendering 30–40% of growth you could have kept is a steep price for a smaller loan. The middle cases come down to modelling: a smaller share of a home you own now, versus 100% of a home you might afford in five years, versus renting and investing the difference. We run those three lines with your real numbers, free, and the answer is usually obvious once it's on paper.
Frequently Asked Questions
Do I pay rent on the government's share?
No. Unlike some community shared-equity products, Help to Buy charges no rent or interest on the government's stake — their return comes only when the equity share is sold or bought back at market value.
What if my income rises above the cap later?
Exceeding the income threshold for two consecutive years generally triggers a requirement to start buying back the government's share. Rising income is expected — the scheme is designed as a stepping stone.
Can I renovate a Help to Buy home?
Yes, with notification/approval requirements for major works. Value you add through renovation also increases the government's share value proportionally, which is worth factoring into big renovation decisions.
Last reviewed 27 July 2026 by Sam Elvitigala, MFAA Accredited Mortgage Broker. General information only — not personal financial or credit advice.