The Albanese Government has brought forward its promise to help up to 70,000 first home buyers annually purchase their first home with a 5% deposit to 01 October 2025 up to a value of $1.5millon in some regions.
In a big boost for aspiring first home buyers waiting till next year to purchase their first home, the Labor Government has fast tracked its policy adjustment to allow first home buyers to buy their first home with a low deposit to this year.
Key Changes to the First Home Buyer Guarantee (FHBG/HGS) Scheme:
- The price caps will be significantly increased for every capital city in Australia, more aligning with the median prices (see below for the price thresholds in your city/region)
- Income limits of $125,000 and $200,000 for couples will be REMOVED i.e. no income restrictions will apply
- Changes come into effect from 01 October 2025, earlier than the original date announced of 01 January 2026
- If you have not owned a property in the past 10 years you may also qualify for the enhanced scheme
- No limits on the number of places available under the scheme from 01 October 2025
- The regional FHBG Scheme will be replaced by a universal First Home Guarantee Scheme, making the approval process far easier
- First home buyers can save up to $45,000 in Lenders Mortgage Insurance (LMI) premiums (LMI Waiver)
Current vs New Price caps in your State/City:
| Location | Current Property Price Cap | New Price Cap from 1 October 2025 |
| NSW – capital city /regional centre | $900,000 | $1,500,000 |
| NSW – other | $750,000 | $800,000 |
| VIC – capital city and regional centre | $800,000 | $950,000 |
| VIC – other | $650,000 | $650,000 |
| QLD – capital city and regional centre | $700,000 | $1,000,000 |
| QLD – other | $550,000 | $700,000 |
| WA – capital city | $600,000 | $850,000 |
| WA – other | $450,000 | $600,000 |
| SA – capital city | $600,000 | $900,000 |
| SA – other | $450,000 | $500,000 |
| TAS – capital city | $600,000 | $700,000 |
| TAS – other | $450,000 | $550,000 |
| ACT | $750,000 | $1,000,000 |
| NT | $600,000 | $600,000 |
| Jervis Bay Territory and Norfolk Island | $550,000 | $550,000 |
| Christmas Island and Cocos (Keeling) Islands | $400,000 | $400,000 |
* Regional centres in New South Wales – Illawarra, Newcastle and Lake Macquarie, (2) in Victoria – Geelong, and (3) in Queensland – Gold Coast and Sunshine Coast.
How to best prepare for the upcoming changes:
To be eligible for the enhanced Scheme from 01 October 2025, buyers must:
- Be Australian citizens or permanent residents – NZ Citizens are accepted
- Be 18 years or older
- Have not owned residential property in the last 10 years
- Have a deposit between 5% and 20% of the property’s assessed value – 2% for single parents will remain
- Intend to reside in the property as an owner-occupier
- Use a Participating Lender
- Sign a valid contract of sale within the required timeframe
- You must have lodged your latest year’s tax return and received your Notice of Assessment
Therefore, if you are planning to take advantage of buying your first home with a 5% deposit from 01 October it is a good idea to ensure your 2025 Notice of Assessment is available prior to this date.
How can FHBA assist you:
Whilst the FHBG Scheme is administered by Housing Australia, your FHBA Coach can assist you in getting ready for the scheme (all at no cost to you) and even help you with the below:
- Determining your borrowing capacity from 01 October 2025
- Getting the pre-approval application ready with the chosen lender
- Help you determine the lowest interest rate option from under 5%
- Prepare the relevant FHBG Scheme Statutory declaration and application forms
Why not Book a Call with a FHBA Coach today to get started!
Written By,
FHBA Coaches
First Home Buyers Australia
