30/10/2025
Changes to the NSW First Home Buyers 5% Deposit Scheme
As of 1 October 2025, the Australian Government’s 5% Deposit Scheme was expanded with the aim of assisting more first home buyers to be able to purchase homes.
The scheme has undergone several major changes that has broadened eligibility and relaxed prior constraints. Some of the key changes are:
No annual place limits: Previously the scheme had a cap on the number of places available each financial year. From 1 Oct 2025, places are unlimited.
No income caps: Previously there were income limits to access the scheme. As of the change, those income thresholds have been removed.
Higher property price caps: The maximum value of properties eligible under the scheme has been raised to reflect current market conditions. In NSW, for example:
For capital city & regional centres (Sydney, Illawarra, Newcastle & Lake Macquarie): the cap moved from $900,000 to $1,500,000.
For “other” areas of NSW: the cap moved from $750,000 to $800,000.
Simplification / consolidation: The separate “Regional First Home Buyer Guarantee” is folded into the main scheme, simplifying access in regional areas.
Minimum deposit remains 5%: You still must have saved at least 5% of the property value (but less than 20% saved, as the scheme is designed for those below the usual 20% deposit threshold) which most banks will require a borrower to have, to avoid paying lenders mortgage insurance.
Here at Fletcher Lawyers our property lawyers can guide you through eligibility for the 5% deposit scheme, contract reviews, and the conveyancing process from start to finish.
