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The federal government has announced it will raise income caps and property price limits for its shared equity home ownership scheme.
As part of the 2025–26 federal budget, released on 25 March 2025, the Labor government will expand the income and price caps for its Help to Buy shared equity scheme.
Under the program, the government will give first-time home buyers an equity share of up to 40 per cent of the purchase price of new homes and 30 per cent of the purchase price of existing homes.
Over four years, the Help to Buy Scheme will allow 40,000 eligible first home buyers nationwide to access the scheme by contributing at least a 2 per cent housing deposit and covering costs such as stamp duty.
The revised scheme’s income caps for participants will also be raised from $90,000 to $100,000 for individuals, and from $120,000 to $160,000 for joint applicants and single parents.
Housing Minister Clare O’Neil said the Labor government aims to tackle the housing crisis “head-on by building more homes, using new technologies, and making it easier for Australians to buy them”.
Price caps around eligible properties will also be increased and linked to the average house price in each state and territory, rather than dwelling prices, to provide first-time home buyers with more market choices.
For example, the new property price cap in NSW will be set below the state’s median home price of $1.3 million to ensure prices follow the borrowing capacity of first home buyers.
To facilitate these changes, the Labor government announced that it has raised its equity investment in the Help to Buy scheme from $5.5 billion to $6.3 billion.
O’Neil said the investment aims to increase eligibility for the Help to Buy scheme and ensures that “ordinary, working class Australians can buy a home of their own”.
The Labor government has also earmarked $54 million in the budget to supercharge prefabricated and modular home construction, which can be built “up to 50 per cent faster than traditionally built homes”.
As part of this investment, $49.3 million will be allocated to supporting state and territory governments to grow prefab and modular housing industries.
An additional $4.7 million will be used to develop a voluntary national certification process for offsite construction to streamline approvals while ensuring that high-quality standards are met.
The Housing Industry Association (HIA) welcomed the Labor government’s new housing initiatives as part of the federal budget.
HIA managing director Jocelyn Martin said the announcements reflected a “positive shift in recognising the need for innovation and affordability in the residential building sector”.
Martin further noted that the expansion of the Help to Buy scheme was something the peak body had called for to “give more first home buyers a real chance to enter the market”.
“Lifting income thresholds and linking property caps to average house prices will better reflect market conditions and broaden the potential uptake of this scheme across more regions.”
Although Martin said the initiatives are a step in the right direction, more needs to be done to bolster the housing supply further and unlock more pathways to home ownership.
“While these initiatives are encouraging, they must be backed by broader and deeper reforms if we are to meet the national target of 1.2 million new homes over five years,” she concluded.
Ahead of the upcoming 2025 federal election, the Coalition’s election pledge to allow first home buyers to withdraw $50,000 from their superannuation has also been commended and scrutinised by industry personnel.
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