A Sydney-first, plain-English comparison of the Australian Government 5% Deposit Scheme and Help to Buy shared equity – plus exactly how NSW stamp duty fits into your plan.
Sydney first-home buyers have two powerful federal levers in 2025, plus a crucial NSW lever that can make or break your first-year cashflow. The 5% Deposit Scheme is a government guarantee that lets you buy with a small deposit while avoiding Lenders Mortgage Insurance, and you own 100% of the property. Help to Buy is shared equity: the Commonwealth co-invests, reducing your loan size and repayments, and you buy back their share later or on sale. NSW’s First Home Buyer Assistance Scheme can wipe transfer duty at certain price points, or discount it just under one million dollars.
From 1 October 2025 the 5% path is more accessible: unlimited places, no income caps, and higher price caps. Help to Buy has income caps, a Sydney cap of 1.3 million dollars, and limited annual places with applications expected later in 2025.
Market snapshot – Spring 2025 (Sydney and NSW)
Competition for A-grade stock increased into spring. It is not a runaway boom, but it rewards preparation: clean pre-approvals, crisp conditions, and valuation-aware pricing. For a monthly read on momentum by city and region, this is a reliable snapshot: PropTrack Home Price Index
Quick facts – so nothing gets mixed up
Ownership: 5% Scheme means you own 100%. Help to Buy means co-ownership until you buy back the equity.
Minimum deposit: 5% or 2% for eligible single parents or legal guardians. Help to Buy from 2%.
Caps: 5% Scheme – 1.5 million dollars in Sydney and NSW regional centres and 800 thousand dollars elsewhere in NSW. Help to Buy – 1.3 million dollars in Sydney and NSW regional centres and 800 thousand dollars elsewhere. If you want to confirm your location’s limit, use the official table once during your prep: Price caps by location
Availability: 5% Scheme – unlimited places and no income caps from 1 October 2025. Help to Buy – income caps and limited annual places.
How NSW transfer duty fits your plan
Under the First Home Buyer Assistance Scheme, eligible buyers pay zero duty up to eight hundred thousand dollars and concessional duty to just under one million. A seven hundred and ninety five thousand dollar townhouse and an eight hundred and five thousand dollar townhouse can feel similar at an open, but only one may keep you in the zero-duty lane. Lay out a duty-aware price ladder before you start. For the state rulebook, read this once: FHBAS – Revenue NSW
Side-by-side comparison
Ownership – 5%: you own 100%. Help to Buy: co-ownership until buy-back.
Minimum deposit – 5% route from 5% or 2% for eligible single parents or legal guardians. Help to Buy from 2%.
Caps – 5%: 1.5 million dollars in Sydney or regional centres, 800 thousand dollars in the rest of NSW. Help to Buy: 1.3 million dollars in Sydney or regional centres, 800 thousand dollars in the rest of NSW.
Income caps – 5%: none. Help to Buy: 100 thousand dollars for singles and 160 thousand dollars for couples or single parents.
Availability – 5%: unlimited places from 1 October 2025. Help to Buy: limited places each year.
Apply via – both paths are accessed through participating lenders. Help to Buy is administered with Housing Australia.
Deep dive – 5% Deposit Scheme
The guarantee strips out LMI at low deposits, keeping more cash in your buffer for due diligence, moving and early fixes. Serviceability still rules: assessment rates above your contract rate, realistic living expenses, and clean recent credit conduct.
Valuation and caps: both the purchase price and the bank’s valuation must be at or below the relevant cap. If your shortlist clusters near the cap, consider backup lender options and buffer your ceiling by one to two percent.
If you want the official description of the guarantee path, open this once and you will have the gist: Australian Government 5% Deposit Scheme – official overview
Deep dive – Help to Buy
By contributing equity, up to forty percent for new and thirty percent for existing, the Commonwealth trims your loan size and repayments. This can make certain suburbs feasible sooner, especially if your priority is monthly cashflow rather than owning 100 percent immediately.
Income caps and annual places mean timing matters at launch. Prepare your documentation early. While you share ownership, you also share gains and losses proportionally, and renovations or refinance steps follow program rules.
For status and timing across the rollout, the central source is here: Treasury – Home Ownership Support
Price to win without overpaying
Do not anchor on guide prices. Build a comp set of three closely comparable sales in the last six to ten weeks and read reports before committing. One primer worth reading once to calibrate how guides are framed: Understanding guide prices
Due diligence that moves risk off your plate
For houses, commission pest and building reports early if a property is a live contender. Moisture, subfloor, roof, and drainage are the big four. Walk the block twice. For strata, read minutes and the capital works plan; elevators, facades, fire safety, and waterproofing dominate big-ticket risks. If you want one practical guide that bundles these checks into a short, repeatable process: Due diligence in Sydney
Underquoting in Sydney – what it looks like and what to do
If underquoting patterns are new to you, this quick explainer will level-set expectations: Underquoting in Sydney
Agent conversations that reveal real risk
Keep this checklist on your phone for each open so you can get the right information fast: Key questions to ask at inspections
What to do next
Quick version: Get the Property 101 Checklist or our Find a House You Can Call Home eBook from the Parker Hadley downloads page.
NSW duty ladder – the quick numbers you should model
Up to eight hundred thousand dollars and eligible means duty zero. Eight hundred thousand to just under one million means concessional duty. One million or not eligible means standard duty. If your shortlist hovers near the thresholds, model three offer levels for each property and pre-agree your walk-away number.
When you have a signed price and contract date, confirm the exact amount here: Revenue NSW – Calculators
Practical run-sheet – from decision to keys
Week 0 to 1 – Decide and pre-approval
Model five years: repayments, buffers, and total outlay under both paths. Shortlist two or three lenders that actively write these loans now. Submit a clean file. Ask about valuation turnarounds. If you want to see the official panel during lender selection, use this once: Participating lenders – official panel
Week 1 to 2 – Targeting and shortlisting
Define must-haves versus nice-to-haves. Build a shortlist of six to ten properties that fit your price ladder and scheme caps. Strike anything that only works if three perfect things happen at once.
Week 2 to 3 – Inspections and due diligence
Order building or pest or strata reports on finalists. For strata, interrogate sinking funds and any talk of special levies. For houses, confirm roof, moisture, and drainage so you are not blindsided on valuation or insurance.
Week 3 to 4 – Pricing, strategy, and offers
Choose your battleground, pre-auction or auction. Align conditions to the risk you are taking. Keep your walk-away pre-agreed and make sure it respects your duty ladder.
Week 4 to 6 – From acceptance to exchange
Once accepted, move quickly. Keep your broker, solicitor, and inspector in a tight loop. Order the valuation immediately. Align contract dates with scheme rules and lender realities. Re-run duty with the state calculator once you have a contract date.
Settlement and first 90 days
Complete a thorough pre-settlement inspection. For Help to Buy, diarise buy-back checkpoints in years one to five and keep tidy records of improvements. For the 5% path, ensure occupancy requirements are met and plan a refinance review as your LVR improves.
Know the rulebook that lenders follow
If you or your adviser want the binding source material that sits behind Help to Buy, this is the official legal repository. You only need to check it once to confirm the current directions and instruments: Federal Register of Legislation
Four Sydney scenarios
Scenario A – Professional couple targeting 1.45 million in a regional centre zone
Seven to eight percent saved and keen to avoid LMI. The 5% path fits the cap and timeline. Duty will be standard above one million, so budget it early. Run a sold-evidence-based auction plan and have a hard walk-away.
Scenario B – Solo buyer around 900 thousand for an apartment
If you meet income thresholds and places are available at launch, Help to Buy can lower repayments and improve comfort. If timing is uncertain, the 5% path with FHBAS concession can be faster with fewer ongoing conditions. Watch strata health and special levies.
Scenario C – Single parent aiming under one million
The 5% Scheme two percent single-parent stream is often the cleanest no-LMI path. Help to Buy may also work if your income and price fit the caps. Keep the target at or under one million to preserve concessions where possible.
Scenario D – New build in outer metro
Both paths can work. The 5% route is fine for land plus build as long as the combined land price and build contract sit under your cap. Help to Buy can cut repayments further on a new build. Key risks are builder timelines and valuation at completion.
FAQs (the ones you will actually ask)
Is the 5% Scheme just the old Home Guarantee Scheme with a new name?
It is the expanded evolution: unlimited places, no income caps, and higher caps from 1 October 2025.
Do I really avoid LMI with only 5% deposit?
Yes, subject to eligibility and lender policy, the guarantee is designed to let you avoid Lenders Mortgage Insurance at low deposit.
When can I apply for Help to Buy?
Applications are expected later in 2025. Because places are limited, prepare documents early and move promptly when applications open.
What are the Sydney caps right now?
5% Scheme: 1.5 million dollars in Sydney or NSW regional centres and 800 thousand dollars elsewhere in NSW. Help to Buy: 1.3 million dollars in Sydney or NSW regional centres and 800 thousand dollars elsewhere in NSW.
Do price and valuation both need to be under the cap for the 5% path?
Yes. If either exceeds the cap, the property does not fit the scheme at that price.
Can I stack NSW concessions with a federal pathway?
Generally yes. NSW duty concessions can sit alongside your chosen federal support, subject to eligibility.
Ready to buy? Let’s talk
If you want a team to design and run the plan from lender selection and scheme fit to inspections, pricing, offers, and auction, see how our process works here: Buyer’s Agent Sydney – How We Work
When you are ready to move from research to keys, start the conversation here: Contact Parker Hadley
