What is the Federal "Co-Ownership" Scheme?

You’ve probably heard about the new scheme from the Help to Buy Scheme (sometimes described as a co-ownership or shared-equity program) by the Australian Federal Government. In simple terms: the Government becomes part-owner of your home so you can get in the market earlier, pay a smaller deposit and borrow less. Then you gradually buy out the Government’s share over time.

Here’s a breakdown of how it works, who might be eligible, how many places are available, and what the limitations are—so you can see if this could be a tool you and your mortgage broker could use.

How it works

• You find a property (could be new or existing, depending on your state and the scheme rules). 

• You contribute a small deposit—as low as ~2% of the purchase price. 

• The Government contributes an equity share of the purchase price: up to about 40% for a new property, up to about 30% for an existing property. 

• You take out a mortgage (with a participating lender) for your share of the home’s value (after your deposit + Government equity).

• You live in the home (it must be your principal place of residence) and over time you can buy more of the Government’s share (or at least eventually repay it when you sell). 

• When you sell, the Government’s share is repaid based on the portion they own and the home’s value at sale time. So if the Government owns 30% and the home has gone up in value, they get 30% of that value. 

• Key point: This isn’t a free grant. The Government becomes a co-owner (or part-owner) of your home during the period of the scheme.

Who can apply – eligibility

Here are the major eligibility criteria that apply (note: final rules may vary by state/territory and may be subject to change). Always check with your broker for current, specific details.

General eligibility

• Must be an Australian citizen, aged 18 or over.

• Must intend to live in the home as your primary residence (investment properties are excluded). 

• You must have saved a minimum deposit (typically at least around 2% of the purchase price). 

• You must be able to obtain a mortgage for your portion with a participating lender (so you still need to meet the usual credit and serviceability checks).

Income and property-ownership rules

• Your taxable income must be below a certain threshold: most recent figures say up to about $100,000 for single applicants, or up to about $160,000 for couples / single parents.

• You must not currently own other property or land in Australia or overseas. 

• Property price caps

• The home you wish to buy must fall under a maximum price cap which varies depending on state/territory and whether you’re buying in a capital/regional centre or rest of state.

• Example caps: For new homes in Sydney/NSW around $1,300,000; other NSW areas approx $800,000. For Queensland capital & regional around $1,000,000; other QLD about $700,000.

How many spots / availability

• The scheme is limited in availability. The Government has indicated about 40,000 spots in total over the life of the scheme (i.e., roughly 10,000 places per year for four years) across Australia.

• Because of this cap, it’s first-in, first-served. Eligible buyers who are ready to act and have their documentation in order will have an advantage.

What are the limitations / things to watch out for

While this is a valuable opportunity, there are several important caveats you (and your broker) should keep in mind:

• Shared equity means less than 100% ownership up front: Until you fully buy out the Government’s share, you don’t own 100% of the property. Future capital gain (or loss) will also be shared. 

• Repayment of Government share: When you sell the property (or sometimes refinance) you’ll need to repay the Government’s portion according to the property’s market value at that time. That means if the home has gone up in value substantially, you’ll owe more than what the Government originally contributed. 

• Ongoing eligibility and income reassessment: Some versions of the scheme may require you to notify if your income increases beyond thresholds; you may then be asked to buy out or repay some of the Government’s share sooner. 

• Type of home and location restrictions: The property must meet the scheme’s criteria (type of dwelling, price cap, being your principal residence). If you pick a property outside these rules you may not qualify.

• Costs still apply: You still pay stamp duty, legal/conveyancing fees, lender fees, loan repayments etc. The scheme helps reduce upfront deposit and loan size but doesn’t erase all costs.

• Future flexibility might be constrained: Because the Government holds an equity share, refinancing, major renovations or moving out may have additional conditions. Make sure you understand how this affects your future plans. 

• Demand may exceed supply: With only 10,000 spots per year, you will likely face competition. Being fully prepared with your finances and documentation will put you in a better position.

• It’s not suitable for investment properties: The scheme is designed for owner-occupiers; you can’t use it purely for investment.

What are the limitations / things to watch out for

While this is a valuable opportunity, there are several important caveats you (and your broker) should keep in mind:

• Shared equity means less than 100% ownership up front: Until you fully buy out the Government’s share, you don’t own 100% of the property. Future capital gain (or loss) will also be shared. 

• Repayment of Government share: When you sell the property (or sometimes refinance) you’ll need to repay the Government’s portion according to the property’s market value at that time. That means if the home has gone up in value substantially, you’ll owe more than what the Government originally contributed. 

• Ongoing eligibility and income reassessment: Some versions of the scheme may require you to notify if your income increases beyond thresholds; you may then be asked to buy out or repay some of the Government’s share sooner. 

• Type of home and location restrictions: The property must meet the scheme’s criteria (type of dwelling, price cap, being your principal residence). If you pick a property outside these rules you may not qualify.

• Costs still apply: You still pay stamp duty, legal/conveyancing fees, lender fees, loan repayments etc. The scheme helps reduce upfront deposit and loan size but doesn’t erase all costs.

• Future flexibility might be constrained: Because the Government holds an equity share, refinancing, major renovations or moving out may have additional conditions. Make sure you understand how this affects your future plans. 

• Demand may exceed supply: With only 10,000 spots per year, you will likely face competition. Being fully prepared with your finances and documentation will put you in a better position.

• It’s not suitable for investment properties: The scheme is designed for owner-occupiers; you can’t use it purely for investment.

How a mortgage broker can help you

If you’re thinking about this scheme, consulting with a specialist mortgage broker is smart. Here’s how a broker will assist:

• Eligibility check: They’ll assess your income, savings, existing obligations, and whether you meet the criteria of the scheme.

• Deposit & loan structuring: Help you understand how the small deposit works with your portion of the loan, how the Government equity piece affects the loan size, and structure the repayments.

• Comparison with alternatives: They can compare this scheme with other Government assistance (like state-based incentives, other first-home buyer schemes) to determine what’s best for you.

• Documentation & timing: Get you ready with the right documents (income proof, savings, etc.), help you approach participating lenders and align your purchase timing with scheme launch/available spots.

• Exit strategy planning: Good brokers will discuss your long-term plan: how you’ll buy out the Government’s share, potential resale, refinancing, what happens if your income changes, etc.

Next steps – what you should do now

If you like what you see and think you might qualify, here’s a suggested action list:

1. Review your position – Check your income, savings, any current property ownership, and whether you can commit to living in the home you purchase.

2. Save/prepare your deposit – Even with just ~2% deposit required, you’ll still need genuine savings and cover other upfront costs (stamp duty, legal).

3. Consult a mortgage broker sooner rather than later – Let them assess your eligibility, talk through how this scheme might work in your case and compare alternatives.

4. Keep an eye on launch dates – The scheme is scheduled to open later in 2025. Being ready early improves your chances of securing one of the limited spots.

5. Understand the fine print – Ask your broker to go through all terms: Government’s share percentage, how you’ll buy it out, repayment at sale, what happens if your circumstances change.

6. Identify target property markets – Make sure you’re looking at homes within the price caps for your area (check the relevant price cap for your state/territory).

7. Budget for all costs – Even though this scheme reduces the deposit and mortgage size, you still need to budget for other home-buying costs.

Final thoughts

This Federal co-ownership/shared equity scheme offers a real opportunity for many Australians who feel stuck waiting to save a big deposit. It can accelerate your entry into home ownership and reduce the burden of large mortgages. But—it’s not without its trade-offs. Shared ownership means partial government ownership initially, and future obligations when your income changes or the home is sold.

Think of it as a tool in your home-buying toolbox—not the only tool. If used wisely, and with the right planning and adviser support, it could make the difference between waiting years to buy versus buying sooner.

Ready to explore this with a broker?

If you’d like help figuring out whether you qualify, how many homes you may afford, or what your monthly mortgage and buy-out plan could look like, reach out today to set up an appointment. Together we’ll unpack your eligibility for the scheme, compare options, and build a clear plan so you’re ready when the scheme opens.

Let’s get you home.

Disclaimer: The information in this article is general in nature and does not constitute financial or legal advice. Eligibility criteria, scheme details, and limits may change. You should seek personalised advice from a licensed mortgage broker, financial adviser, or relevant government authority before making any decisions.