First Home Buyer Incentives in 2026

If you've been saving for your first home, now is genuinely the best time in years to make your move. The October 2025 federal government expansion has transformed what's possible for first home buyers, and the changes are dramatic. Income caps are gone, property price limits have jumped significantly, and thousands of more homes are suddenly within reach. This guide breaks down every scheme, grant, and incentive available right now so you can make an informed decision.

What Changed in October 2025: The Big Expansion

The federal government didn't just tweak the rules in October, they fundamentally rewrote them. The biggest shift? Income caps completely disappeared. Before October, you had to earn less than $125,000 as an individual or $200,000 as a couple to qualify. Now, there's no upper limit on what you can earn and still access the schemes.

The second major change is unlimited places. Previously, only 35,000 people per year could access the First Home Guarantee. That cap is gone. Every eligible first home buyer can now apply without worrying about places running out or rush-applying before quotas fill. Property price caps also increased substantially to reflect actual market conditions, meaning far more homes are now eligible than ever before.

Unlimited Places and No Income Caps

Starting October 1, 2025, the government removed both income caps and place limitations entirely. This means you're not competing with thousands of others for a limited number of scheme spots. If you meet the basic eligibility criteria, you're in. The removal of income caps is particularly significant for professionals, trade workers, and anyone earning above previous thresholds who thought they'd missed out on affordable entry into the market.

Higher Property Price Caps by State and Region

The property price caps now reflect average house prices in each city and region, not average dwelling prices (which include apartments and are typically lower). In Sydney and surrounds, the cap jumped from $900,000 to $1.5 million. Brisbane's cap went from $700,000 to $1 million. Melbourne rose from $800,000 to $950,000. Adelaide hit $900,000, and even regional areas saw substantial increases. This matters because it means you're not stuck looking at only the cheapest suburbs anymore.

Federal Home Guarantee Scheme (First Home Guarantee)

The First Home Guarantee is the flagship federal scheme, and it's designed to get you into the market quickly without paying Lenders Mortgage Insurance. Here's what makes it work for real buyers, not just on paper: you only need 5% of the purchase price saved as a genuine deposit. For a $500,000 home, that's $25,000. The government then guarantees 15% of the property value to your lender, meaning you can borrow the rest without paying LMI (which would normally cost tens of thousands of dollars).

Buy With Just a 5% Deposit

A $500,000 property normally requires $100,000 for a 20% deposit to avoid LMI. Under the First Home Guarantee, you only need $25,000. That's a massive difference in how long it takes to save. Someone saving $10,000 a year gets into the market in 2.5 years instead of 10 years. For buyers in Brisbane purchasing a $1 million home with a $50,000 deposit, the government estimates you could save up to 10 years of saving time while also avoiding approximately $42,000 in LMI costs.

How You Avoid Lenders Mortgage Insurance

Normally, borrowing more than 80% of a property's value triggers LMI, which protects the lender (not you) if you can't pay. It's expensive, non-refundable, and gets added to your loan balance. The government guarantee replaces this. Your lender is covered by the government guarantee instead, so you skip the LMI entirely. You do pay application fees and normal legal costs, but you avoid that massive insurance bill.

Eligibility requirements:

• Australian citizen or permanent resident aged 18+

• First home buyer (or haven't owned property in the past 10 years)

• Income: No caps from October 1, 2025

• Deposit: Between 5-20% of purchase price

• Property: Must be your primary residence

Help to Buy Scheme: Government Co-Investment Option

Help to Buy is different. Instead of a guarantee, the government actually co-invests in your property through a shared equity arrangement. You and the government share ownership, with the government contributing 30-40% of the purchase price. As you pay off your mortgage and build equity, you're building toward buying out the government's share.

Get Up to 40% Equity from the Government

With Help to Buy, you can purchase a home with just a 2% deposit. The government contributes up to 40% for new homes or 30% for established homes. This dramatically reduces your mortgage size. A buyer purchasing a $519,000 home with a 2% deposit and 30% government equity saves approximately $900 per month on mortgage payments compared to traditional financing. Over time, as your equity grows, you can refinance and buy out the government's share, eventually owning 100% of the property.

Who's Eligible After the 2025 Budget Changes

The 2025 budget expanded Help to Buy eligibility. Individual income must not exceed $100,000 (up from $90,000), or $160,000 for joint applicants (up from $120,000). You can't own other property in Australia or overseas, must have saved your deposit in genuine savings, and need to be able to afford the stamp duty, legal fees, and bank fees upfront. Property price caps also increased substantially, with Sydney now at $1.5 million and Brisbane at $1 million.

State-Based First Home Owner Grants

While federal schemes apply nationally, every state and territory also offers its own First Home Owner Grant. These are direct cash payments, typically between $10,000 and $30,000, designed to help with purchase costs. You can often combine federal schemes with state grants for even more support.

Grant Amounts Vary by State

Queensland remains among the most generous, offering $15,000 for established homes or $30,000 for newly built homes. South Australia provides up to $15,000. New South Wales offers various amounts depending on the region. Tasmania, Western Australia, Victoria, and the Northern Territory all have their own programs. Some states restrict grants to newly built homes, while others allow established properties. The key is checking your specific state's requirements because they vary significantly.

Property Value Limits for Each State

Most states cap property values, though these have increased. South Australia allows properties up to $650,000 (or $700,000 with partial relief above that). Queensland increased its cap to $700,000 for established homes. NSW has regional variations, as do other states. Some states have no caps at all on property value but restrict grants to new builds, which naturally limits the pool. This is where a professional valuation becomes crucial, as properties must meet the valuation requirements of each scheme.

Stamp Duty Concessions and Relief Programs

Stamp duty is one of the hidden costs that derails first home buyer plans. It's a state-based tax on property transfers, and it can range from thousands to tens of thousands of dollars depending on property price and location. Most states offer some concession or relief for first home buyers.

Which States Offer Relief to First Home Buyers

Queensland offers a full exemption for properties under $700,000, worth up to $24,525 in savings. New South Wales provides relief on homes under $800,000. South Australia exempts duty on established homes up to $650,000. Victoria, Western Australia, Tasmania, and other states all have their own concession systems. Some are exemptions (no duty at all), while others are partial concessions (reduced rates). Understanding your state's system is essential because stamp duty relief can be the difference between affordability and overextending.

Real Savings by State and Property Price

A first home buyer in Queensland purchasing a $700,000 established home saves the full stamp duty, which would normally be approximately $24,525. In South Australia, the same price point saves stamp duty entirely on a $650,000 property. These aren't small numbers, and they materially affect your overall purchase costs and ongoing mortgage servicing.

First Home Super Saver Scheme (FHSS)

The FHSS is unique because it lets you use your superannuation to build a deposit faster. You make voluntary contributions to your super fund, which grow tax-advantaged (only 15% tax on earnings instead of your marginal rate), and then you can withdraw those contributions when you're ready to buy your first home.

Using Your Super to Build a Deposit

If you're in the 37% tax bracket, contributing to super instead of saving in a bank account saves you 22% on tax. The earnings inside super are also taxed at only 15% instead of your personal rate. You can contribute up to $27,500 per financial year under the FHSS rules, and then withdraw your contributions plus earnings tax-free when you buy your first home. For high earners, this is a powerful deposit-building tool.

Contribution Limits and Tax Advantages

You can contribute the $27,500 annual limit each financial year you're saving. When you're ready to buy, you apply to your super fund for a withdrawal. The key is planning ahead, as super contributions are made before tax, so they reduce your taxable income. This means you might pay less income tax overall while simultaneously building a deposit, making it a genuinely smart strategy for disciplined savers.

8 FAQs About First Home Buyer Incentives

What's the main difference between the First Home Guarantee and Help to Buy? 

The First Home Guarantee is a government guarantee that replaces LMI (requires 5% deposit). Help to Buy is shared equity, where the government co-invests in your property (requires 2% deposit). First Home Guarantee is simpler; Help to Buy reduces your mortgage but requires ongoing shared ownership.

Can I access multiple first home buyer incentives at once? 

Absolutely. You can combine the First Home Guarantee with state grants and stamp duty concessions. Help to Buy works the same way. Many buyers use a federal scheme plus state grants to maximise their position. You're responsible for checking eligibility with each program.

Are there income limits for first home buyer schemes in 2025? 

Not anymore. Income caps were removed entirely from October 1, 2025. There's no maximum income that disqualifies you from the federal schemes. State grants may have their own criteria, so check your state's specific rules.

What property prices qualify under the October 2025 new caps? 

It depends on your location and whether you're buying a house or unit. Sydney now caps at $1.5 million for metro areas. Brisbane is $1 million. Melbourne $950,000. Most units are eligible under these new caps. Check with your lender or a mortgage broker for your specific postcode to verify eligibility.

Do I need to be a first home buyer or can I re-enter the market? 

The First Home Guarantee and most state grants require you to be a first home buyer or not have owned property in Australia for the past 10 years. Help to Buy has different rules, so check the specific scheme. Re-entering the market after a 10-year gap might qualify you.

How long does it take to receive a first home owner grant? 

State grants typically take 4-8 weeks after settlement, though some states are slower. Federal schemes like the First Home Guarantee are processed through your lender as part of the loan application. Check your specific state's timeline, as they vary.

When can I refinance my Help to Buy loan and buy out the government's equity? 

You can refinance once you've built sufficient equity. As property values increase and you pay down the mortgage, your equity grows. Typically, buyers refinance after 3-5 years when they've built enough equity to buy out the government's share without needing a larger deposit upfront.

How do I apply for first home buyer incentives? 

Federal schemes are accessed through participating lenders as part of your home loan application. State grants are applied for directly with state revenue offices (after settlement for most states). Your mortgage broker can guide you through which schemes you qualify for and help coordinate applications. Before committing to a property, work with a certified property valuer to ensure the property meets lender and scheme requirements.

Getting Your Property Valued

Once you've found the home you want to buy and before you commit to a purchase, getting a professional valuation is essential. Lenders require valuations to approve loans, and the property must meet scheme requirements. A professional valuation ensures you're buying at fair market value and that the property qualifies under the relevant scheme's guidelines.

Alliance Australia Property provides professional valuations across Australia to support first home buyers through the purchase process. Whether you need a valuation to guide your decision or for loan approval, our certified valuers can help you understand the true value of your first home. For the latest information on federal schemes, visit Housing Australia's Home Guarantee Scheme page.