On 1 October 2025, the Federal Government expanded the First Home Guarantee Scheme (‘Scheme’) to help first home buyers access the ever-increasing Australian property market.
What is the First Home Guarantee Scheme?
The Scheme, which was first introduced in 2020, allows first home buyers to purchase a new or existing home with just a 5% deposit. The Federal Government then guarantees the other 15% of the deposit allowing for first home buyers to avoid Lenders Mortgage Insurance (‘LMI’).
Prior to the expansion, the Scheme was limited to properties of up to $900,000 and would only guarantee up to 35,000 loans each financial year. To qualify, individual applicants needed to have a taxable income of $125,000 or less and joint applicants needed a taxable income of $200,000 or less.
In response to rising property prices, the Federal Government has expanded the Scheme to provide greater access to potential first home buyers.
How has the First Home Guarantee Scheme changed?
On 1 October 2025 the First Home Guarantee Scheme made the following changes:
- No place limits: all Australian first home buyers who have saved a 5% deposit can apply.
- No income caps: first home buyers with higher incomes can access the Scheme.
- Higher property price caps: to help home buyers where property prices have increased.
- Simpler access in regional areas: Regional First Home Buyer Guarantee will be replaced by the First Home Guarantee
How will changes to the First Home Guarantee Scheme help First Home Buyers?
Access to the First Home Guarantee Scheme is no longer bound by placeholder limits or income limits. Now anyone, regardless of their income, can access the Scheme and enjoy the benefit of a 5% deposit and avoid LMI.
The Scheme has also increased the property price cap to reflect increased house prices across Australia. In the NSW metropolitan and regional centre areas, the Scheme’s property cap of $900,000 has increased to $1.5 million. This increased property cap broadens the possibilities for first home buyers in Sydney. It is important to note that this property cap varies depending on your location in Australia, and whether you are purchasing an urban or rural Australian property.
Visit the First Home Buyers website to learn more about how changes to the First Home Guarantee Scheme will help first home buyers in Australia.
NSW Stamp Duty Exemption
The First Home Guarantee Scheme works in conjunction with the NSW First Home Buyers Assistance Scheme (‘NSW Assistance Scheme’). The NSW Assistance Scheme provides first home buyers with a full exemption from transfer duty when buying a new or existing home valued up to $800,000.
The NSW Assistance Scheme also provides concessional rates on transfer duty to first home buyers purchasing a new or existing home valued above $800,000, but less than $1 million. This Scheme is not bound by income limits which allows first home buyers, regardless of their income, to benefit from a waiver of duty or a concessional rate of duty.
For more information on the NSW Assistance Scheme, visit the Revenue NSW website.
What do changes to the First Home Guarantee Scheme look like for First Home Buyers?
Example (1): First Home Buyer of a $750,000 Sydney Apartment
With the new changes to the First Home Guarantee Scheme and utilising the NSW Assistance Scheme, a first home buyer could purchase a Sydney apartment for $750,000 and regardless of their income, benefit from a 5% deposit, the avoidance of LMI, and a full exemption of transfer duty on the purchase.
Example (2): First Home Buyer of an $950,000 Sydney Apartment
Similar to the first example, a first home buyer can utilise these schemes to purchase a Sydney Apartment for $950,000 and benefit from a 5% deposit and the avoidance of LMI regardless of their income. However, since the purchase price is between $800,000 and $1 million, they can only benefit from a concessional transfer duty rate.
Example (3): First Home Buyer of a $1.6 million Sydney Home
If a first home buyer wanted to purchase a property in Sydney for $1.6 million, they cannot benefit from either the First Home Guarantee or the NSW Assistance Scheme as the purchase price exceeds the new $1.5 million threshold.
Contact Us
If you are a first home buyer looking to secure the first home guarantee or a stamp duty exemption, we recommend seeking legal advice from an experienced property lawyer. To discuss which option in right for you, please contact Etheringtons Solicitors in North Sydney on (02) 9963 9800 or send an enquiry via our contact form.