Help to Buy income price cap backflip: Do you qualify for first home buyer help?

The Help to Buy scheme – first announced back in 2022 – is set to provide easier entry to the property market for 10,000 people each year. The government makes contributions of up to 40%, while prospective buyers will only need a 2% deposit.

The main sticking point for many with the long-awaited scheme has been the income cut off. While individuals had to previously earn less than $90,000 to be in line for a coveted chance at a subsidised entry into the market, that cap has now been increased by $10,000.

This means Australians aged 18 and over who do not own property either in Australia or overseas are eligible to enter the market with a deposit of just 2%, providing their income is less than $100,000 per year.

An adult in full-time employment in Australia earns an average of $1,975.80 a week, Australian Bureau of Statistics data shows, meaning competition for the scheme will be high.

The entry point into the market for couples has also been changed, with less than 48 hours to go before the Labor government delivers the 2025 federal budget.

Couples must now earn no more than $160,000 per year between them, up significantly from the previous threshold of $120,000. Single parents are assessed against the $160,000 joint applicant cap.

Five million more homes

The announcement of changing prices caps also included an update on the number of properties prospective buyers can consider.

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New property price caps linked to average house prices across each state and territory have been introduced, broadening the range of options available.

Buyers in Sydney and other regional centres of New South Wales have a healthy $1,300,000 cap to play with – almost $200,000 higher than the median value of a Sydney home.

The price cap for Melbourne is $950,000 – a welcome boost for the struggling state – while home buyers in Brisbane and the Australian Capital Territory have a new cap of $1,000,000. Perth has an $850,000 cap, while Adelaide’s cap is $900,000.

Splashing the cash

Increasing both the property price cap and income limitations will come at a cost to the government, though the expensive pledge is not unexpected in a competitive election year.

The government estimates its equity investment in the Help to Buy program will increase $800m to $6.3bn – an eye watering sum but an answer to wide-spread calls to widen accessibility in the competitive market.

“We’re tackling the housing crisis head-on by building more homes, using new technologies, and making it easier for Australians to buy them,” housing minister Clare O’Neill said.

"I’ve got a pretty straight-forward goal here – to make sure that ordinary, working class Australians can buy a home of their own.

“That’s why we’re expanding Help to Buy so that most first home buyers are eligible.”

The Help to Buy scheme is expected to open to applications later this year and will benefit a total 40,000 Australians over a four-year period.