Help to Buy Scheme Australia 2026: Sydney Buyer's Complete Guide

If you have been priced out of the Sydney market on a normal salary, the federal Help to Buy scheme is the most generous purchase support available to you in 2026. It launched in December 2025 and as of May 2026 around 2,300 places have been approved across the country. It lets you buy a home with a 2% deposit and the government takes a stake in the property alongside you.

This guide explains how Help to Buy actually works in Sydney, who qualifies, what it costs, and how it compares to other support schemes. We have written it for Hills District and wider Sydney buyers earning between $60,000 and $160,000 who are otherwise locked out. Last updated May 2026.

What the Help to Buy scheme actually is, in plain English

Help to Buy is a federal shared equity scheme run by Housing Australia. The government becomes a part owner of the home you buy. In return, you only have to fund part of the purchase price yourself.

Here is the simplest way to think about it. If you buy a $900,000 townhouse in Norwest under Help to Buy, and the government takes a 30% equity contribution, the government effectively chips in $270,000 of the purchase price. You only need to fund the remaining $630,000 through your deposit and your mortgage. You still own the home. You live in it. You can paint walls, plant a garden, and call it yours. But when you eventually sell, 30% of the sale price (or 40% on a new build) goes back to the government.

The point of the scheme is to lower the size of the mortgage you need. A smaller mortgage means smaller repayments, easier serviceability, and less interest paid over the life of the loan. For Sydney first home buyers on average wages, that is the difference between getting in now or being locked out for another decade.

Help to Buy sits alongside other federal and NSW first home buyer support. You can read our full NSW first home buyer checklist for the broader picture, and the First Home Guarantee with the new $1.5M cap for the closest alternative. To see the loan side of things, our home loans service walks through what your mortgage looks like under each scheme.

The 2026 income caps and what counts as taxable income

Help to Buy is means tested. The income caps as of May 2026 are:

• $100,000 per year for a single applicant
• $160,000 per year for a couple, or for a single parent with at least one dependent child

These are caps on your gross taxable income. That is the income figure on your most recent ATO Notice of Assessment, not your take-home pay. So if you earn $98,000 in salary and have a small amount of bank interest, you might still be under the cap. If you earn $90,000 in salary plus $15,000 in side hustle income, you are over.

What counts as taxable income for the test:

• Salary and wages (including bonuses and commissions)
• Self-employed net business income
• Investment income (interest, dividends, rental income)
• Reportable fringe benefits
• Reportable superannuation contributions (salary sacrifice)
• Most government allowances

What does not count toward the cap:

• Family Tax Benefit
• Child Care Subsidy
• Most superannuation guarantee contributions (the standard employer 11.5%)
• One-off lump sums like inheritance or a redundancy payout taken outside salary

The cap is tested against your income from the most recent financial year before you apply. Housing Australia will ask for your ATO Notice of Assessment. If you have only just got a pay rise that pushes you over, the year just gone is what matters, not your current run rate.

If you are close to the line, talk to a Sydney mortgage broker before you apply. There may be timing options around when you submit your application that help.

How much equity the government takes (30% existing, 40% new build)

The government's equity contribution depends on what type of property you buy.

• Existing home, the government takes up to 30% equity.
• Newly built home (including off the plan, house and land, or a new construction), the government takes up to 40% equity.

The bigger contribution on new builds exists because the scheme also encourages new housing supply. From a buyer's point of view, a new build is even less mortgage to service.

A worked example for a $900,000 Norwest townhouse:

In both scenarios you only contribute a $18,000 deposit (2% of $900,000). The government's contribution is not a loan you are repaying, so the mortgage you actually service is just on your share of the property.

You do not have to take the full 30% or 40%. You can request a smaller equity contribution if you want a smaller government share, perhaps because you expect strong capital growth and you want to keep more of it. Most buyers take the maximum allowed because the goal is the smallest mortgage possible.

When you sell, the government takes the same percentage of the sale price. If you bought a $900,000 home with 30% government equity and you sell years later for $1,100,000, the government's 30% share is now worth $330,000. You keep 70%, which is $770,000. The government shares in capital growth, but they also share in capital loss if prices fall.

The 2% deposit explained and what else you need to pay

The headline number on Help to Buy is the 2% deposit. That is the genuine minimum. There is no Lenders Mortgage Insurance (LMI) added, because Housing Australia effectively guarantees the loan via the equity share.

For a $900,000 Norwest property, your settlement-day cash needs look like:

For a Sydney first home buyer purchasing at $900,000, you should have $25,000 to $30,000 in genuine savings to cover the 2% deposit plus settlement costs. If the property qualifies for full NSW stamp duty exemption (the cap is currently $800,000 for full exemption with concession up to $1,000,000), you save tens of thousands more. See our guide to NSW stamp duty concessions for the detail, or model your own number with the stamp duty calculator.

You also need to demonstrate to the lender that you can service the mortgage on your share. Even with a smaller loan, your income still has to comfortably cover the repayments at the bank's assessment rate (usually your actual rate plus a 3% buffer). Use our borrowing power calculator to get a rough sense of what your share looks like before you book a chat.

Sydney property price caps under Help to Buy

There is a hard cap on the purchase price for Sydney properties under Help to Buy. As of May 2026 the Sydney cap is $1,000,000. The cap covers Greater Sydney including the Hills District.

That means properties in Castle Hill, Baulkham Hills, Kellyville, Norwest, Bella Vista, and Rouse Hill are all eligible as long as the purchase price is at or under $1 million. In practice this lines up reasonably well with townhouses, two and three bedroom apartments, and some smaller detached homes in those suburbs.

For freestanding Hills District houses, the median has been running well above $1 million for several years, so the scheme works best for:

• Two bedroom apartments in Castle Hill and Norwest (typically $650,000 to $900,000)
• Townhouses in Kellyville, Rouse Hill, Baulkham Hills ($800,000 to $1,000,000)
• Smaller older homes in outer Hills District suburbs (varying)
• New off-the-plan apartments in Norwest and Castle Hill ($650,000 to $950,000)

The cap is reviewed periodically by Housing Australia. There has been some advocacy for lifting the Sydney cap given how quickly the median has moved, but as of May 2026 it sits at $1,000,000.

If your eligible property options are limited by the cap, consider:

• A house and land package in growth corridors (Box Hill, Marsden Park, Schofields) where you can buy a new build under the cap and benefit from the 40% government equity
• A townhouse in established Hills District suburbs at the lower end of the market
• An apartment closer to a major train station like Castle Hill, Norwest, or Bella Vista

A local Norwest mortgage broker can help you map the price cap against the suburbs you actually want to live in.

What happens if your income goes up after you buy

The income cap is not only checked once at application. Housing Australia runs ongoing income tests after settlement. The rule is:

If your taxable income exceeds the relevant cap for two consecutive financial years after purchase, Housing Australia may require you to start buying back the government's equity share.

A couple of things to be clear about:

1. One bad year does not trigger anything. You have to exceed the cap for two financial years in a row.
2. "May require" means it is not automatic. Housing Australia assesses your circumstances and decides on the next step.
3. If a buy-back is required, you are usually given a reasonable time to refinance into a standard mortgage and pay out the equity stake, not asked to repay overnight.

So what does that mean in practice for a couple earning $155,000 combined when they buy? If one of them gets a promotion and the household income jumps to $180,000 in 2027 and stays above the cap in 2028, they should expect to start the buy-back process from 2029. They have time to plan.

Selling, renovating, or refinancing under shared equity

Living in a property with a shared equity arrangement is mostly the same as owning normally. There are a few specific differences:

• Selling: You can sell at any time. The government takes its equity percentage of the gross sale price. You walk away with the rest, minus the mortgage you still owe, agent fees, and conveyancing.
• Renovating: You can renovate, but you need Housing Australia's consent for material improvements above a certain threshold (currently around $20,000). The reason is that significant renovations increase the property value, and the government shares in that growth. For minor cosmetic work (painting, flooring, small bathroom refresh under $20k), no approval is needed.
• Refinancing the mortgage portion: You can refinance your mortgage with a participating lender. You cannot just walk down to any bank and refinance, because the equity share has to be acknowledged on title. As more lenders join the scheme through 2026, refinancing options will broaden.
• Buying back the government share: You can buy back the government's equity at any time. The buy-back is done at the current market value, not the original purchase price. So if your home has appreciated, buying back is more expensive than the original government contribution.
• Renting it out: Help to Buy is for owner-occupied homes only. You cannot rent the whole property out. If your circumstances change (transfer interstate, family situation), Housing Australia will assess whether you can keep the property under the scheme. Usually they require you to either sell or buy out the share.
• Vacation periods: Short term absences (holidays, working interstate for a few months) are fine. The owner-occupier test is about your principal place of residence, not literal 365 day presence.

Help to Buy vs First Home Guarantee: which one is better for you?

These two schemes get confused all the time. They are not the same. Here is the quick comparison.

Choose Help to Buy if: you have a small deposit, your income is under the caps, the property you want is under $1M in Sydney, and you would rather have a smaller mortgage than 100% ownership.

Choose First Home Guarantee if: you have a 5% deposit, your income is above the Help to Buy caps but under the FHG caps, or you want to buy at $1.2M and that is above the Help to Buy cap.

For a full deep dive on the FHG side, read First Home Guarantee with the new $1.5M cap.

You cannot use both schemes on the same purchase. You have to pick one.

Current participating lenders and how to apply

As of May 2026, the initial participating lenders are:

• Commonwealth Bank of Australia
• Bank Australia

More lenders are expected to join through 2026. ANZ has publicly stated they are working on integration, and several smaller lenders have flagged intent.

The application process has two parallel tracks. You need a Housing Australia approval (for the scheme eligibility) and a lender approval (for the mortgage on your share).

Step by step:

1. Check eligibility: confirm income, deposit, citizenship, and that you do not currently own property anywhere.
2. Get pre-approval from a participating lender: this confirms your mortgage capacity on your share.
3. Apply to Housing Australia for a place in the scheme: places are released in tranches, so applications are time sensitive.
4. Receive your scheme allocation: this is your written confirmation that a place is reserved for you.
5. Find a property within the cap: Sydney cap $1,000,000, and the property type must be eligible.
6. Submit the property to Housing Australia and your lender for final approval: this includes valuation.
7. Settle: the government equity is registered on title, your mortgage settles, you get the keys.

The whole process from initial enquiry to settlement is typically 4 to 6 months, depending on how long the property search takes. Pre-approval lasts 3 to 6 months depending on the lender.

For Hills District buyers, we recommend starting the lender pre-approval and Housing Australia application together. Once you have both, you have certainty around what you can buy and the search becomes much easier.

A Sydney mortgage broker familiar with Help to Buy can run both processes in parallel for you. We see the timeline issues other buyers hit and we plan around them. See our full range of home loan services for related options, or book a strategy call to map your specific eligibility.

Ready to find out if you qualify?

The Help to Buy scheme is genuinely game changing for the right buyer. It is also the most complex of the federal support schemes. Getting it right means matching the income cap, the property cap, the lender, the timing of your application, and your longer term plans into one tidy package.

Book a free 15 minute strategy call with Sumit Joshi, director and senior loan advisor at RyRo Loan Centre. We are based in Norwest, we work across the Hills District and wider Sydney, and we have helped first home buyers through every federal scheme since FHLDS launched. We will run the eligibility checks, give you a clear yes or no on Help to Buy, and lay out your alternatives if it is not the right fit.

Call 1300 11 7976 or book online at www.ryroloancentre.com.au.