If you’re a lower-income or middle-income earner, you will soon have a new way to buy a property, after the federal parliament passed legislation for Help to Buy.

Under Help to Buy, individual buyers who earn less than $90,000 per year or joint buyers who earn less than a combined $120,000 will be able to purchase a property in tandem with the government.

The government will take an equity stake of up to 30% in an established property or up to 40% in a new property, thereby reducing the amount of money you must contribute to enter the market. If you eventually sell the home, the government will receive some of the sale proceeds, equivalent to their stake.

Property price caps apply, which vary from location to location, from $450,000 in the regional areas of Western Australia, South Australia and Tasmania to $950,000 in Sydney.

Help to Buy will be open to any Australian citizens who do not currently own a home and who intend to live in the property they purchase. Buyers will need a deposit of only 2% and will not need to pay lender’s mortgage insurance.

However, while the scheme has been approved at the federal level – and therefore in the ACT and Northern Territory – it has not yet been approved at the state level. For that to happen, each individual state will need to pass supporting legislation; once a state does so, it will be able to participate in Help to Buy. Ideally, that will happen sometime in 2025, although it depends on each state’s circumstances.