New Housing Scheme in Australia: What First Home Buyers Need to Know in 2025

The dream of homeownership is evolving in Australia. With rising property prices and tighter deposit requirements, the government is stepping in with a new housing scheme designed to make the leap into homeownership more accessible. In this post, we break down the benefits, costs, eligibility criteria, and state-specific stamp duty details of the scheme, along with answers to key questions many first home buyers are asking.

What Is the New Housing Scheme?

The new government initiative – an expansion of the existing Help to Buy shared equity scheme – aims to reduce the financial burden for eligible buyers by providing an equity contribution toward your home purchase. Under this scheme:

• For new homes: The government may contribute up to 40% of the purchase price.

• For existing properties: The contribution is up to 30%.

This means buyers only need to finance the remaining 60%–70% of the property price with a smaller deposit requirement (as little as 2% for some segments). While the scheme is primarily aimed at first home buyers (or those who haven’t owned property in the last 10 years), its benefits can sometimes extend to other eligible buyers.

How Much Do Buyers Benefit and What Do They Pay?

Buyer Contributions

• Deposit: Depending on your eligibility, you may only need a deposit of 2%–5% of the property’s value.

• Mortgage: With a significant government contribution, you finance a smaller loan, resulting in lower monthly repayments and often avoiding the need for lenders’ mortgage insurance (LMI).

Government Contribution by Property Type

• New Homes: Up to 40% of the purchase price is funded by the government.

• Existing Homes: The contribution is around 30%.

For example, if you’re buying a new home valued at $1,000,000, the government could contribute up to $400,000, leaving you to finance about $600,000 (minus your deposit). This directly translates to lower borrowing costs and increased affordability.

Does the Scheme Only Apply to First Home Buyers?

While the primary target is first home buyers – or those who haven’t held an interest in a property in the past 10 years – the scheme’s eligibility criteria can sometimes allow other buyers to participate if they meet the income and property conditions. Importantly, if you’re a first home buyer, you may still be eligible for the First Home Owner Grant (FHOG) on a new build, as the two incentives are administered separately by state governments.

When Does the Scheme Start?

Applications for the expanded Help to Buy scheme are expected to open later in 2025 after all legislative and implementation details have been finalised. Keep an eye on announcements from your local participating lender or government housing website for the official launch date.

Stamp Duty for First Home Buyers Across Australia

Stamp duty – a major upfront cost – varies by state. Here’s a quick summary of common concessions:

• New South Wales:

  • Exemption: Full exemption for homes under $800,000.

  • Concession: Reduced duty for properties valued between $800,000 and $1,000,000.

• Victoria:

  • Exemption: No stamp duty on homes up to $600,000.

  • Concession: Sliding scale for homes between $600,001 and $750,000.

• Queensland:

  • Exemption: Full exemption for properties under $700,000.

  • Concession: Concessions for properties valued between $701,000 and $800,000.

• Western Australia:

  • Exemption: No stamp duty for homes below $450,000.

  • Concession: Concessional rate applies up to $600,000.

• South Australia:

  • Exemption: Full exemption for existing homes up to $650,000; vacant land for building up to $400,000.

• Australian Capital Territory (ACT):

  • Exemption/Concession: New homes under $470,000 are exempt, with concessions on new builds valued between $470,000 and $607,000.

• Northern Territory:

  • Currently, NT offers limited stamp duty concessions for first home buyers.

• Tasmania:

  • Offers a 50% concession on properties valued under $600,000.

Note: Exact figures can vary, so it’s always best to use an online stamp duty calculator or consult your local revenue office.

Income Thresholds for Eligibility

To qualify for the new scheme, the government has raised income caps to:

• Single applicants: Up to $100,000 per year.

• Couples or single parents: Up to $160,000 per year.

These thresholds ensure that the assistance is targeted at households that genuinely need support to enter the market.

What Happens if Your Income Increases?

Because the scheme is based on a shared equity model, there’s a built-in mechanism to ensure ongoing fairness. If your income exceeds the set threshold (for instance, if you earn more than $100,000 as a single applicant or $160,000 as a couple) for two consecutive years, you may be required to repay some or all of the government’s equity contribution when you sell the home or buy out the government’s share. This condition is designed to help ensure that the benefits remain available to those who continue to qualify financially.

In Summary

The new housing scheme offers:

• Significant savings: Reduced mortgage size and lower LMI costs.

• High government contributions: Up to 40% for new homes, 30% for existing.

• Wider eligibility: Higher income thresholds (up to $100k for singles and $160k for couples/single parents) and potential compatibility with first home buyer grants.

• Varied stamp duty relief: State-specific exemptions and concessions to further ease upfront costs.

• A fair repayment structure: If your income improves, a portion of the government’s contribution may need to be repaid.

For home buyers looking to secure affordable home loans and take advantage of government assistance, this expanded scheme is a game-changer.

Ready to take the next step?
Contact a trusted mortgage broker today to explore how this new scheme could lower your costs and get you into your dream home. Get expert advice tailored to your financial situation and make the most of these opportunities.