What is the Help to Buy shared equity scheme?
Help to Buy is a federal government shared equity scheme that lets eligible buyers purchase a home with as little as a 2% deposit, with the government co-owning up to 30–40% of the property. You borrow less, pay lower repayments, and don't pay rent on the government's share — but they hold an equity stake you'll need to buy back when you sell or choose to. Income caps apply: $90,000 per year for singles, $120,000 for couples.
The Fuller Picture
Help to Buy is a federal shared equity scheme designed to help buyers on modest incomes get into the market without saving a large deposit. Rather than lending you more money, the government buys a share of your home alongside you — up to 40% of the purchase price for a new build, or up to 30% for an existing property. You take out a smaller mortgage, your repayments are lower, and you typically avoid lenders mortgage insurance because your loan-to-value ratio stays within standard lending thresholds.
The scheme is income-tested. Singles must earn $90,000 per year or less; couples or joint applicants must earn $120,000 or less combined. You don't need to be a first home buyer to qualify, but you must not currently own property and the home must be your principal place of residence. Property price caps apply and vary by location — in NSW, caps are generally higher in metropolitan areas than in regional ones. You'll need a minimum 2% genuine savings deposit to be eligible.
The government's equity share is managed by Housing Australia. You can voluntarily buy back the government's stake over time — in partial amounts or in full — at the market value at the point of purchase. When you sell the property, the sale proceeds are split proportionally based on each party's share. The scheme is intended as a stepping stone, with the expectation that buyers will gradually increase their equity stake as their financial position improves.
What This Means for Your Purchase
Help to Buy changes the numbers on your purchase significantly. If you're buying a $700,000 home and the government takes a 30% stake, you need to borrow roughly $490,000 rather than around $665,000 (assuming a 2% deposit). Lower borrowing means lower monthly repayments and, in theory, a faster path to building equity — provided the property grows in value and you steadily buy back the government's share over time.
The financial implication worth understanding upfront is that the government's share is not free money — it's equity. If your property increases in value from $700,000 to $850,000, the government's 30% stake is worth approximately $255,000 at that point, not the original $210,000. This matters when planning how long you intend to hold the property, when you might refinance, or how much capital you actually capture when you sell. Buyers should model this over different time horizons with a mortgage broker or financial adviser before committing.
This scheme suits buyers who have stable employment and genuine savings but can't reach a 20% deposit threshold in a reasonable timeframe. It may be less suitable for buyers planning significant renovations, since improvements to the property increase market value — and therefore the cost of buying back the government's share when the time comes.
How This Shows Up in the Illawarra
Help to Buy's property price caps are broadly workable across the Illawarra. Wollongong and surrounding suburbs generally fall within the metropolitan cap, covering a reasonable range of established homes and apartments in suburbs like Fairy Meadow, Corrimal, Dapto, and Albion Park. Entry-level properties in these areas commonly price in the $650,000–$850,000 range, which typically falls within the scheme's thresholds for existing homes. If you're targeting something tightly priced — a unit in Wollongong or a house further south toward Shellharbour or Lake Illawarra — the scheme is likely to be compatible with what's available.
For buyers targeting higher-priced Illawarra suburbs — Thirroul, Bulli, Austinmer, or the northern coastal strip — price caps may become a constraint. These markets have seen sustained price pressure from Sydney commuter demand, and finding an eligible property within the scheme's cap may require patience or a willingness to consider units over houses. A buyers agent who knows the local market can help you quickly identify whether your target area and price point align with what's available under the scheme, rather than spending time on properties that won't qualify.
Frequently Asked Questions
Do I have to be a first home buyer to use Help to Buy?
No. Help to Buy is open to any eligible Australian who does not currently own a home and meets the income and deposit criteria. It's not limited to first home buyers, though many using it will be buying for the first time.
Does the government charge rent on its share of the property?
No. You don't pay rent on the government's equity stake while you live in the home. However, the government does share in capital growth — so if the property increases in value, you'll pay more to buy back their share later than the original contribution cost.
Can I combine Help to Buy with other first home buyer concessions?
Potentially. Some concessions such as stamp duty exemptions may be compatible depending on your circumstances, while others may not stack. A mortgage broker or conveyancer can confirm what's available to you based on current rules.
What happens when I sell the property?
At settlement, the net sale proceeds are divided proportionally based on each party's equity share. If the government owns 30%, they receive 30% of the net proceeds. Any outstanding mortgage balance is repaid from your portion first.
What if I can't afford to buy back the government's share?
You're not required to buy it back on any set timetable while you live in the property. You can make voluntary purchases of additional equity when your finances allow, or leave the arrangement in place until you sell.
Would a buyers agent help with a Help to Buy purchase?
Yes. Finding a property that meets both your needs and the scheme's price caps — particularly in a competitive market — takes local knowledge. A buyers agent who understands the Illawarra can narrow your search to eligible properties and help you move quickly when the right one comes up.
If you're exploring Help to Buy and want to know whether it works for your target suburb and price point in the Illawarra, we're happy to have a conversation. Reach out and we can help you work out whether the scheme fits your situation and what properties to look at.
