Under the changes, income thresholds will increase from $90,000 to $100,000 for singles and from $120,000 to $160,000 for couples or single parents.
Property price caps will also rise substantially, with Sydney’s limit jumping from $950,000 to $1.3 million, Brisbane from $700,000 to $1 million, and Melbourne from $850,000 to $950,000 according to the ABC.
The scheme, which allows eligible homebuyers to “co-buy” properties with the government, will maintain its original allocation of 40,000 places over four years.
The government will take a 30 per cent stake in existing homes or 40 per cent in new builds, reducing the deposit and mortgage size needed by purchasers.
Housing Minister Clare O’Neil defended the expansion, which will cost an additional $800 million, bringing the total investment to $6.3 billion.
“The changes that we’re making today will expand this scheme to make sure that more young people get more government support for more homes around the country,” Ms O’Neil said.
The government argues that with these adjustments, most first-home buyers will qualify for the program, and approximately two-thirds of properties nationwide will fall under the revised price caps.
Price caps will now be tied to median house prices in each region rather than median dwelling prices.
The Help to Buy scheme only passed through parliament late last year after significant political opposition.
The Coalition argued against the concept of government co-ownership, while the Greens initially withheld support in hopes of securing broader housing market reforms.
Housing economists remain divided on the scheme’s effectiveness.
Some support it as a way to help low-income Australians enter the property market with minimal impact on overall house prices.
Peter Tulip from the Centre for Independent Studies said he was skeptical about the program’s value, even with the expanded parameters.
“It’s a big windfall for the lucky recipients, and they will be able to bid much more aggressively at auctions, and they will put up prices,” Mr Tulip told the ABC.
“The lucky lottery winners are really happy with this, but everybody else suffers higher prices.”
A similar shared equity scheme in New South Wales was recently shuttered due to lack of interest, despite being more targeted toward specific groups including single parents, older singles, and essential workers.
Critics argue the federal government should focus more on increasing housing supply by working with state and local governments.
Mr Tulip pointed to efforts in New South Wales and Victoria to overcome local council opposition to new housing developments.
“We are seeing the New South Wales and Victorian governments, which are doing a lot to get building going in their states, taking on the local councils that are opposing new housing,” he said.
“I wish the federal government would give them a bit more help.”
The budget will also include nearly $50 million for states and territories to develop the prefabricated and modular home construction sector, part of the government’s broader housing strategy.
Ms O’Neil said that while building more homes remains central to addressing housing affordability, immediate support for homebuyers is also necessary.
“The centre of our response is building more homes because the reason that so many Australians are in housing distress is because we have a housing shortage,” she said.
“We’ve got a now $33 billion housing package.
“Most of that money is going into building more homes.”
