Help to Buy Scheme: How to Buy Your First Home With a 2% Deposit
The Help to Buy scheme is a federal government shared equity program that allows eligible first home buyers to purchase a new home with as little as a 2% deposit. The government contributes up to 40% of the purchase price, which means you borrow less, your repayments are lower, and you need significantly less cash upfront.
For a $1,000,000 new build in Queensland, that means your deposit could be as low as $20,000 — with weekly repayments of approximately $750 to $800, compared to $1,000 to $1,250 on a full loan. Low Deposit Homes helps eligible buyers access Help to Buy alongside other government schemes to minimise the total cost of getting into their first home.
How Does Help to Buy Work?
Help to Buy is a shared equity scheme. That means the government buys a share of your property alongside you. You own the home and live in it — the government simply holds an equity stake that you can buy back over time.
Here’s how it works in practice:
You contribute a minimum 2% deposit. The government contributes up to 40% of the purchase price for a new home (or up to 30% for an existing home). You take out a home loan for the remaining portion. You make repayments only on your portion of the loan — not the government’s share. Over time, you can “staircase” out by paying off the government’s share as your income increases.
The government’s share is silent — there are no interest charges or rent on their portion. You live in the home as the full owner-occupier. The government’s equity share is only realised when you eventually sell, or when you choose to buy them out.
Help to Buy — The Numbers
For a $1,000,000 new build in Queensland:
| Component | Amount |
|---|---|
| Your deposit (2%) | $20,000 |
| Government contribution (40%) | $400,000 |
| Your home loan (58%) | $580,000 |
| Weekly repayments (approx.) | $750–$800 |
Compare that to a standard purchase at 5% deposit with no shared equity:
| Component | Amount |
|---|---|
| Your deposit (5%) | $50,000 |
| Your home loan (95%) | $950,000 |
| Weekly repayments (approx.) | $1,000–$1,250 |
The difference: $30,000 less deposit needed upfront, and $200 to $450 less per week in repayments.
Who Is Eligible for Help to Buy?
To qualify, you must meet all of the following:
- Australian citizen (permanent residents are not eligible for Help to Buy — this is different from the 5% Deposit Scheme which accepts permanent residents).
- Household taxable income under $160,000 (or individual income under $100,000).
- You must not currently own property in Australia.
- The property must be your principal place of residence.
- The property must be within the applicable price cap for your area.
Important: Help to Buy requires Australian citizenship, not just permanent residency. This is a key difference from the 5% Deposit Scheme and catches some buyers off guard. Low Deposit Homes checks eligibility upfront so you know exactly which schemes apply to your situation.
Help to Buy vs the 5% Deposit Scheme — What's the Difference?
These are the two main federal schemes for first home buyers, and they work very differently. You cannot use both on the same purchase — Low Deposit Homes advises which is better for your specific situation.
| Help to Buy | 5% Deposit Scheme | |
|---|---|---|
| Minimum deposit | 2% | 5% |
| Government role | Buys up to 40% equity share | Guarantees 15% to lender (no equity taken) |
| Your loan size | 58% of property value | 95% of property value |
| Weekly repayments | Significantly lower | Standard repayments on full loan |
| LMI | $0 | $0 |
| Income cap | $160,000 household | No income cap (removed Oct 2025) |
| Residency | Australian citizens only | Citizens and permanent residents |
| Government owns a share? | Yes — until you buy them out | No |
| Best for | Lower income buyers who want lower repayments | Higher income buyers who want full ownership immediately |
When Does Help to Buy Make More Sense?
Help to Buy is ideal when your household income is under $160,000 and you want the lowest possible repayments, when you have limited savings and need a smaller deposit (2% vs 5%), or when your priority is getting into the market now and you’re comfortable with the government holding an equity share that you buy back over time.
The 5% Deposit Scheme is better when your household income is above $160,000 (you won’t qualify for Help to Buy), when you want to own 100% of the property from day one, or when you’re a permanent resident (Help to Buy requires citizenship).
Low Deposit Homes uses Help to Buy as a sliding scale tool — the government share doesn’t have to be the full 40%. It can be 10%, 15%, or 25% depending on what you need to make the numbers work. This flexibility is one of the most underused features of the scheme.
What Happens to the Government's Share?
The government’s equity share is valued at the future market value of the property when you eventually sell or buy them out — not at the original purchase price. This means if your property increases in value, the government’s share increases proportionally.
You can “staircase” out at any time by making additional payments to buy back the government’s share. Many buyers plan to do this as their income grows over the first 5 to 10 years. There is no deadline to buy out the government’s share.
Can I Use Help to Buy With Other Schemes?
Help to Buy stacks with several other first home buyer benefits:
| Scheme | Works with Help to Buy? |
|---|---|
| First Home Owner Grant (QLD $30,000 / VIC $10,000) | Yes |
| Stamp duty exemption (new builds) | Yes |
| First Home Super Saver Scheme | Yes |
| 5% Deposit Scheme | No — choose one or the other |
Where Can I Use Help to Buy?
Help to Buy applies nationally. Low Deposit Homes helps buyers access it across Queensland and Victoria:
Queensland corridors: Ipswich (Ripley, Springfield, Rosewood, Collingwood Park), Logan (Yarrabilba, Park Ridge, Flagstone), Greater Brisbane, Beaudesert, and Toowoomba.
Melbourne corridors: South East (Pakenham, Cranbourne, Officer), North (Craigieburn, Mickleham, Donnybrook), West (Werribee, Point Cook, Tarneit).
Property price caps apply by location. Low Deposit Homes structures every package to sit within the relevant cap for your area.
How Low Deposit Homes Helps!
Low Deposit Homes doesn’t just tell you about Help to Buy — we structure your entire purchase around it. We assess whether Help to Buy or the 5% Deposit Scheme is better for your situation, calculate the exact government share you need (it doesn’t have to be the full 40%), find house and land packages within the price caps, connect you with specialist brokers who handle Help to Buy applications, and guide you from first call to getting your keys.
Low Deposit Homes has worked directly with developers across Queensland and Victoria to secure exclusive access to registered land — meaning the land title is already issued and ready to contract. This is particularly important for Help to Buy clients because the scheme requires a signed land contract to proceed with your application. Without registered land, you may not be able to move forward. With Low Deposit Homes, you can sign your contract, lodge your application, and move into the construction phase without delay. This exclusive land access is one of the key things that sets Low Deposit Homes apart from other services.
It costs you nothing. Low Deposit Homes earns its fee from the builder, not from you.
Frequently Asked Questions
Can I rent out my Help to Buy property?
No. Help to Buy requires you to live in the property as your principal place of residence. If your circumstances change, you would need to discuss options with Housing Australia.
Can I renovate or extend my Help to Buy property?
Yes, but significant renovations may require approval from Housing Australia since they hold an equity share. Minor cosmetic changes are generally fine.
What happens if I sell my Help to Buy property?
The government receives their percentage share of the sale price. If you purchased with a 40% government share and sell for $1,200,000, the government receives $480,000 (40%) and you receive $720,000 (60%) plus any principal you’ve paid down on your loan.
Is Help to Buy available for existing homes?
In some cases, yes. Buyers who previously owned a property but have since sold it and do not currently own property may be eligible. Low Deposit Homes can assess your specific situation.
Can second home buyers use Help to Buy?
Yes, but the government contribution is capped at 30% for existing homes (compared to 40% for new builds). This is another reason new builds offer a stronger benefit — and why Low Deposit Homes focuses on house and land packages.