First Home Buyer Deposit Scheme – changes now effective
As of 1 October 2025, the Australian Government’s Home Guarantee Scheme (known as the 5% Deposit Scheme) has been significantly expanded to support more first home buyers, removing income and place caps while increasing property price caps.
What’s changed?
The expanded Scheme removes previous barriers, making the Scheme more accessible:
- No income caps: Previous income caps of $125,000 for singles and $200,000 for couples have been removed, with the Scheme now open to all income levels.
- Unlimited places: There is no longer a cap on the number of successful applicants.
- Higher property price caps: Reflecting a changing property market, property price caps have increased across all states. For Tasmania the new caps will be $700,000 for Hobart (previously $600,000) and $550,000 for all other areas.
Who is eligible
To qualify for the Scheme, applicants must:
- Be at least 18 years old.
- Be an Australian citizen or permanent resident.
- Be a first home buyer or not have owned property in Australia in the last 10 years.
- Intend to live in the home as their principal place of residence.
- Have saved a minimum 5% deposit of the property’s value.
How it works
Eligible applicants can apply through one of the participating lenders and if successful, receive a government guarantee for the remaining 15% of the deposit, which means avoiding payment of Lender’s Mortgage Insurance (LMI). The result is a potential saving of thousands of dollars over the life of a loan.
Impact on other incentives
The 5% Deposit Scheme does not impact eligibility for other state government first home buyer initiatives. First home buyers in Tasmania may also qualify for:
- Government Duty Exemption: For purchases of existing homes under $750,000 intended to be used as a principal residence, there is a 100% government duty exemption, currently available until 30 June 2026.
- Government Duty Concession: For purchases of new apartments and units under $750,000 intended to be used as a principal residence, there is a 50% government duty exemption, currently available until 30 June 2026.
- First Home Owner Grant: Up to $10,000 for the purchase or construction of new homes.
Summary
The 5% Deposit Scheme offers a pathway to ownership for buyers who were previously locked out of the market. Combined with existing state government incentives, home buyers are being supported and incentivised like never before.
How we can help
Page Seager’s Property team is experienced in dealing with property transactions and assisting home buyers in successfully applying for government duty exemptions and concessions. If you are looking to purchase a property, please contact us.
