New Government Changes Could Help You Buy Sooner — Here’s How

What’s changing?

On 1 October 2025, the Australian Government rolled out major expansions to its Home Guarantee/First Home Buyer support framework. Key changes include:

  • No place limits: There will no longer be a cap on the number of government-backed guarantees available. Any eligible first-home buyer with a sufficient deposit may apply.

  • Income caps removed: Previously, single buyers were limited to ~$125,000 and couples to ~$200,000. Those caps have been dropped.

  • Higher property price caps: In Victoria, the cap for metropolitan and regional centre properties (i.e., Melbourne/Geelong) increased from $800,000 to $950,000. The cap in other regional Victorian areas remains at $650,000.

  • No lender’s mortgage insurance (LMI) for low-deposit buyers: Under the guarantee, buyers putting down as little as 5 per cent (and meeting other criteria) will not have to pay LMI.

Eligibility basics (unchanged or clarified):

  • Must be a first-home buyer (or not owned property in past 10 years) and intend to live in the property.

  • Loans subject to normal serviceability and credit assessments by lenders.

  • Scheme is administered through participating lenders.

These changes are intended to make home ownership more accessible, especially in a market with rising property values.

What’s changed at the Victorian/State level:

  • Victorian Homebuyer Fund is now closed to new participants. The shared equity scheme that allowed the state government to contribute up to 25 per cent (with buyers contributing 5 per cent) is no longer accepting new applications.

  • Existing stamp duty rules remain, with limited updates. Victoria continues to offer stamp duty exemptions or concessions for first home buyers:

  • Full exemption from Stamp Duty for homes priced up to $600,000.

  • A tapering (pro-rata) concession on Stamp Duty between $600,001 and $750,000 whereby the full rate of Stamp Duty is payable at the top of this range.

  • Off-the-plan concessions are also extended in some cases for new builds/apartments/townhouses.

What this means:

These changes have several important consequences for how we should operate and advise clients:

  • Broader pool of eligible buyers: The removal of income caps and new location limits means more buyers may now qualify under the scheme. This can expand our potential buyer base, particularly among those who were previously excluded by income thresholds.

  • Price bracket shift: With the higher price cap ($950,000 in metropolitan Victoria), more properties—especially mid-ring or higher priced suburbs—may now be eligible. This could shift buyer demand upward in locations that were previously out of range under older caps.

  • Stronger interest in townhouses and mid-density options: Early data suggests that first-home buyers are showing stronger interest in townhouses and other mid-density options under the expanded scheme.

  • Caution needed: While the scheme reduces deposit barriers, buyers still must manage full mortgage servicing, interest rate risk and potential downside if property prices fall.

The below table shows the total savings required by first-home buyers to cover the 5 per cent deposit and the Stamp Duty under the new scheme at various property price points.

A few other things to keep in mind with this scheme:

  • If a buyer purchases for $1 over $950,000 then they will require an extra $32,000 in savings to cover the Lenders Mortgage Insurance (LMI) that will apply!

  • If a vendor demands a 10 per cent deposit on the day on auction, they may limit the buyers they have access to because many could be first-home buyers who only have a 5 per cent deposit. That said, if the buyer is pre-approved (hopefully through GreenBack Capital), then they could potentially settle within 30 days.

  • Please note, if the buyer is a single parent who is buying their principal place of residence, this scheme allows for them to supply a 2 per cent deposit with no LMI.

  • Given both above points it seems sensible to have the deposit discussion with your vendors before auction day. And also to understand from potential buyers whether they are participating in the First Home Buyers’ Scheme and if so, that they have their approval from participating lenders.

  • In Victoria, a $10,000 Grant is available from the State Government if you purchase a new home for under $750,000. This means you can access the 5 per cent deposit scheme and receive the $10,000 grant.

Ready to take the next step? Let’s talk.