Policy Update · May 2026
Government Housing Policy Changes 2026 — What Every Buyer Needs to Know
The past 12 months have brought more change to Australia's housing policy landscape than the previous five years combined. From an expanded first home buyer guarantee to a brand-new shared equity scheme, significant HECS changes, and a foreign buyer ban extended to 2029 — knowing what's current, what's changed, and what no longer exists is critical for anyone planning to buy in 2026.
1. First Home Guarantee Scheme — Unlimited Places, No Income Cap (From 1 October 2025)
The First Home Guarantee Scheme (FHGS) was overhauled from 1 October 2025 in the most significant expansion since it launched. Previously, single applicants needed income below $125,000 and couples below $200,000, and places were capped at 35,000 per year — typically exhausted by February. Both restrictions have been removed entirely.
The Sydney property price cap is now $1,500,000. The core benefit is unchanged: purchase with a 5% deposit, and the government guarantees up to 15% of the loan value — eliminating Lenders Mortgage Insurance entirely. On a typical Sydney purchase, LMI can cost $18,000–$30,000, so this is a material saving.
Access: NHFIC-approved panel lenders only
The FHGS must be accessed through a participating lender on the National Housing Finance and Investment Corporation panel. Bridge Finance works with several approved lenders and can identify which products qualify in your situation.
2. Help to Buy — Australia's Shared Equity Scheme Is Now Live
The Help to Buy scheme launched in December 2025. The federal government takes an equity stake in your property: up to 40% for new builds and up to 30% for established homes. You only need a 2% deposit. In exchange, the government shares proportionally in capital gains (and losses) when you sell or buy out their share.
Income limits apply: $100,000 for singles and $160,000 for couples. The Sydney property price cap is $1,300,000.
⚠️ Broker note: Currently only available through Bank Australia for broker loans
Help to Buy is currently available for broker-originated loans through Bank Australia only. This limits your lender choice if you access the scheme via a broker — an important consideration before committing to this path. We recommend a full pros/cons discussion at your consultation.
3. NSW Stamp Duty — Full Exemption Under $800k (and What's No Longer Available)
First home buyers in NSW pay zero stamp duty on properties up to $800,000. Between $800,000 and $1,000,000, a concessional rate applies. On an $800,000 purchase, the full exemption is worth $31,335 — directly improving your LVR position.
🚫 First Home Buyer Choice: Abolished June 2023 — no longer available
The NSW "First Home Buyer Choice" scheme — which let first home buyers elect an annual property tax instead of upfront stamp duty — was repealed in June 2023 when NSW Labor took office. It is not available for any new purchase. Any advice you have seen referencing this option is outdated.
4. HECS-HELP Debt — Two Major Changes That Affect Your Borrowing Capacity
20% debt reduction (1 June 2025): All outstanding HECS-HELP balances were reduced by 20% from 1 June 2025. A borrower who owed $50,000 saw their balance automatically drop to $40,000. This was part of the Albanese government's higher education reform package following the 2025 federal election.
New marginal repayment system (2025-26): Under the old system, crossing the minimum repayment threshold meant paying a percentage of your total income — creating a sharp repayment jump the moment you earned one dollar above the threshold. The new system is marginal: you only pay on income above each threshold band, exactly like income tax. This is fairer and reduces the repayment burden for earners near the threshold.
Despite the 20% reduction, HECS still materially affects borrowing capacity. A $40,000 balance on a $100,000 income can reduce your borrowing capacity by $45,000–$60,000. See our detailed guide: HECS Debt and Home Loans →
5. Foreign Buyer Ban — Extended to June 2029
A ban on foreign nationals purchasing established residential dwellings took effect from 1 April 2025. Originally set to run until March 2027, the ban was extended by the re-elected Albanese government to June 2029. Foreign buyers may still purchase new properties, off-the-plan apartments and vacant land in many cases — the restriction is specifically targeted at established existing dwellings.
For clients on temporary or permanent visas, separate FIRB rules apply. Bridge Finance will identify the right purchasing pathway for your visa class at your first consultation.
How to Combine Multiple Schemes
Many first home buyers can access multiple schemes simultaneously — for example, combining the FHGS (no LMI with 5% deposit) with the NSW stamp duty exemption (save up to $31,335) and the FHOG ($10,000 for new builds). The total benefit can exceed $60,000 on the right purchase. The catch: eligibility rules vary, and schemes need to be structured in the right order. Bridge Finance's first consultation is free, covers every scheme you qualify for, and calculates the combined dollar benefit for your specific purchase.
About the Author
William Zhu
Director, Bridge Finance. 8 years of mortgage broking + 5 years in construction. $600M+ settled. Access to 70+ lenders. MFAA member.
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