Announcement date
13 June 2025
Link to announcement
Help to Buy Program Directions 2025
Problem being addressed
Home ownership rates have been falling in Australia over recent decades. While a variety of factors, including changing societal attitudes and norms, have impacted home ownership rates, the relative affordability of housing has fallen substantially over the past four decades. Strong and sustained increases in housing prices, particularly compared to growth in incomes, have made both saving for a deposit and servicing a mortgage significantly more challenging, particularly for low-income households. Between 1994 and 2021 rates of home ownership declined from 71.4 per cent to 66.3 per cent.
Proposal
The Help to Buy scheme is expected to address both the deposit and serviceability hurdles to home ownership. Under the proposed scheme, the Government would help to meet the upfront capital cost of purchasing a home, thus reducing the size of the mortgage required by an eligible home buyer.
Help to Buy has lower income caps than the Home Guarantee Scheme. These lower caps are intended to target low- and middle-income earners who lack the borrowing power required to service a typical mortgage for a modest home.
Help to Buy will be open to 10,000 Australian households each year (over four years). Eligible homebuyers will need a minimum deposit of 2 per cent, and the Government will provide an equity contribution of up 40 per cent of the purchase price of a new home and up to 30 per cent of the purchase price of an existing home.
Assessed Impact Analysis outcome
Adequate
Assessment comments
The IA addresses the seven IA questions and follows an appropriate policy development process commensurate with the significance of the problem and magnitude of the proposed intervention. To be considered ‘Good practice’ as per the Australian Government Guide to Policy Impact Analysis, the IA would have benefitted from greater depth of analysis and including further quantitative analysis of the likely costs and benefits.
Regulatory burden
The Treasury estimates the Help to Buy shared equity scheme will increase average regulatory costs by $5.88 million per year, over ten years.