Unlocking The Federal Government Help to Buy Shared Equity Scheme
For many first home buyers, the biggest barrier isn’t motivation or planning, it’s the gap between what you can borrow and the cost of a quality home.
That’s where the Federal Government’s Help to Buy shared equity scheme comes in.
For some buyers, this scheme can be a genuine pathway into the market sooner. For others, the long-term trade-offs, restrictions, and shared ownership can make it far more complex than it first appears.
In this resource, we’ll break down how Help to Buy actually works, what it’s like to live with shared equity day to day, how you exit the scheme, and when it might or might not make sense.
This post supports Episode 26 of the First Home Unlocked Podcast: Unlocking the Federal Government Help to Buy Shared Equity Scheme.
What Is Shared Equity?
Shared equity is where a third party in this case, the Federal Government contributes a portion of the purchase price in exchange for an equivalent share of your home’s value.
You still:
Buy the property
Live in the home
Maintain it
Pay your mortgage as normal
But you do not own 100% of the property.
Instead:
You take out a standard home loan for your share with a participating lender
The government holds its share in the background
You don’t pay interest or repayments on the government’s portion
When you sell, refinance, or buy them out, the government’s share moves with the market.
The Feral Government Help to Buy Scheme
The Help to Buy scheme is the Governments version of a shared equity scheme. It is designed for buyers who:
Can’t borrow enough on their income to buy a suitable home
Have saved a small deposit but still fall short of servicing a full loan
Want to enter the market sooner rather than waiting many more years
To participate, you’ll need:
A minimum 2% deposit
Enough savings to cover all upfront costs (stamp duty, conveyancing, insurance, etc.)
The government will then contribute:
Up to 30% for existing homes
Up to 40% for new homes or new builds
The goal is to reduce the size of your mortgage so repayments are more manageable.
So let’s say you’re buying a home for $800,000.
Your minimum deposit (2%): $16,000
Based on your income, you can service a loan of: $544,000
Government contribution (30%): $240,000
Then if the home later increases in value to $900,000, the government’s share in 30% of the growth. This means there original contribution of $240,000 has now grown to $270,000.
Eligibility
To qualify for Help to Buy, you must:
Be an Australian citizen
Be at least 18 years old
Apply as an individual or with one other person
Be under the income caps:
$100,000 for singles
$160,000 combined for couples or single parents
Not currently own property in Australia or overseas
(with limited exceptions for single parents selling an existing home)Live in the property as your principal place of residence
Eligible properties under the scheme include:
New or existing homes
Townhouses and apartments
House and land packages
Off-the-plan purchases
Land with a building contract
State-based price caps apply and places are limited to 10,000 per year.
At launch, only Bank Australia and Commonwealth Bank are participating lenders, which significantly narrows your lender choice.
What It’s Like Living With Shared Equity
This is where many first home buyers underestimate the impact of the scheme. Let’s break down things to consider when you are living with the Help to Buy Scheme.
Ongoing Reviews and Income Monitoring
Housing Australia can review your eligibility at any time and will formally reassess at least every five years. If your income exceeds the threshold for two consecutive years, you may be required to:
Repay at least 5% of the home’s current value, or
Repay the government’s entire share
The Home Must Remain Your Residence
While you’re in the scheme:
The property must be your principal place of residence
You can’t rent it out or use it as an investment
Exceptions are limited and assessed case by case
Certain Decisions Require Approval
Because ownership is shared, you’ll need formal approval for things like:
Refinancing
Selling the property
Adding or removing a co-owner
Valuations Are Part of the Journey
Valuations are required when:
Buying back equity
Refinancing
Selling
Completing major renovations
You pay for these valuations, and you must maintain full replacement building insurance and provide an updated certificate every year to Housing Australia.
Renovations Come With Rules
You can renovate the property, but:
Any work over $20,000, or
Anything requiring council approval
Must be approved in advance so that you keep 100% of the value you add. If not approved beforehand, the government may share in that added value.
How You Exit the Scheme
When you want to exit the scheme, there are four main pathways to do so.
1. Selling the Property
The first is selling your home. When you do sell, the proceeds from the sale will need to be paid out in the following order:
Your lender (remaining loan balance)
Housing Australia (government’s share at current value)
Selling costs
Any remaining funds to you
Because the government share is percentage-based, it moves with the market. So if the property has grown in value, their share has grown too.
2. Refinancing and Buying Them Out
The second pathway is refinancing into a standard loan and paying out the Government's share, which is possible if:
Your income has increased enough to service the full loan, or
Your equity position has improved over time where the property has grown in value, or because you’ve paid down your loan over time giving you enough room to buy back some or all of the Government’s share.
3. Buying Back Equity Gradually
The third pathway is buying back the Government’s share gradually in stages. If you do there are some rules:
Minimum 5% of the property’s current value each time
Each repayment requires a valuation (paid by you)
As prices rise, the minimum buy-back amount rises too.
4. Required Repayment Due to Income Growth
If your income goes above the scheme’s threshold for two years in a row, you may be required to repay part or all of the Government’s share.
When that happens, your Participating Lender will do a financial assessment to work out what’s reasonable for you to repay based on your current situation.'
The partial or full repayment may be required within 90 days.
This is why expected income growth needs to be considered upfront.
Our Thoughts on Shared Equity and the Help to Buy Scheme
Our personal view is that for most first home buyers, shared equity isn’t the first pathway we’d explore.
That’s not because the Help to Buy scheme is a bad option, but because there are often cleaner pathways that achieve the same goal without giving up ownership or long-term flexibility.
One of the strongest alternatives is the First Home Guarantee (5% Deposit Scheme), which we covered back in Episode 10. That scheme allows eligible buyers to purchase with as little as a 5% deposit, avoid Lenders Mortgage Insurance, and importantly, retain 100% ownership of their home.
Also first home buyers may also have access to:
LMI waivers (which we cover next)
Or family guarantor loans
These options can often allow buyers to enter the market without sharing ownership or future growth, which is why we always encourage exploring them first before defaulting to shared equity.
When Help to Buy Can Genuinely Make Sense
There is a group of buyers where the Help to Buy scheme can be a thoughtful and appropriate solution.
Shared equity may be worth considering if:
Your income is limited and unlikely to increase significantly
A reduced loan size materially improves serviceability
It’s the only realistic way to access a well-located, high-quality asset
The alternative is remaining locked out of the market for many more years
Chris also raised an important point in this episode that shared equity schemes like Help to Buy aren’t just relevant to first home buyers.
There’s a growing group of people who:
Have owned property in the past but no longer do
Are single parents or families needing housing stability
Are experiencing significant housing and rental insecurity
Don’t qualify for schemes like the 5% Deposit Scheme
In today’s market, shelter anxiety is real. Rental vacancy rates are tight, rents have risen sharply, and for families with kids in school zones and constant moving add real stress. In those situations, shared equity can offer:
A pathway back into secure housing
Confidence to buy rather than rent
Stability for families who value certainty over flexibility
As Chris put it, when the alternative is continued rental stress or being locked out of ownership altogether, shared equity can be an option, especially when paired with a quality property that’s unlikely to cause regret down the track.
That’s where asset quality becomes critical. As we discussed in Episode 6: Unlocking Asset Quality, buying the right property matters even more when flexibility is reduced. A strong asset can still build equity over time, even within a shared ownership structure.
If you’d like support mapping out whether shared equity makes sense for your situation, or whether a cleaner pathway exists, you can listen to Episode 26 for the full breakdown or Book a Get to Know You Chat to work through your options calmly and clearly.
Final Thoughts: Entry Matters, But So Does the Exit
Shared equity can open doors but it also adds complexity, shared growth, and long-term considerations that need to be understood before you commit.
The best outcomes come from:
Comparing all available pathways
Choosing a quality asset
Understanding how today’s decision affects tomorrow’s flexibility
If you’d like help comparing Help to Buy with other options like the 5% Deposit Scheme, LMI waivers, or family guarantors, you can book a Get to Know You Chat via the link in the show notes.
And if you want the full conversation and strategy discussion, listen to Episode 26 of First Home Unlocked
