To make home ownership more attainable, the Labor government is set to expand the Home Guarantee Scheme (HGS) in January 2026, marking a significant shift in Australia’s housing policy landscape. This expansion is designed to open the doors of home ownership to a broader range of Australians, offering a lifeline to first-time buyers who have traditionally struggled to break into the property market.
The Current State of the Home Guarantee Scheme
The HGS has been a game-changer for many aspiring homeowners, allowing eligible first home buyers to enter the market with a deposit as low as 5%. A key advantage of the scheme is that it exempts participants from paying lenders mortgage insurance, a cost that can often be a significant financial hurdle. This initiative has successfully helped numerous Australians achieve their home ownership dreams, but the government acknowledges that further improvements are needed to address the diverse needs of all potential buyers.
What Changes Are Coming in 2026?
The upcoming expansion of the HGS includes several pivotal changes aimed at increasing accessibility and inclusivity. Here’s a breakdown of what to expect:
Abolition of Income Caps: One of the most transformative changes is the removal of income caps. Under the current scheme, only those within certain income brackets are eligible, which has limited access for some individuals and families. By abolishing these caps, the scheme will welcome a wider range of participants, ensuring that more Australians, regardless of their earnings, can take advantage of the benefits.
Increased Property Price Limits: The expansion will also see an increase in the property price limits, giving buyers access to a broader spectrum of housing options. This change is particularly important in urban areas where property prices have historically been a barrier to entry for first home buyers. With higher price limits, participants can explore a wider array of properties that better meet their lifestyle and investment goals.
Removal of Application Caps: Currently, there is a cap on the number of people who can apply for the scheme each year, which can limit opportunities for prospective buyers. The removal of this cap is a strategic move to make the scheme universally accessible, ensuring that all eligible first home buyers can participate without the fear of missing out due to application limits.
As we look towards 2026, prospective home buyers should prepare to seize the opportunities presented by this expansion, setting the stage for a new era in the Australian property market. Whether you’re a first-time buyer or advising one, staying informed and proactive will be key to capitalising on this transformative initiative.