Understanding Home Loan Policies and Government Support

What Changed With Government Home Loan Support in Late 2025

The Australian Government removed annual place limits and income caps from its 5% Deposit Scheme from 1 October 2025. Eligible first home buyers can now purchase with a deposit of as little as 5% of the property value, with Housing Australia providing a guarantee to the participating lender of up to 15% of the property value, enabling borrowers to reach a combined deposit and guarantee of 20% without paying LMI. In Mandurah, where many first home buyers are stretching to enter the market around the Peel region's median, this change matters because it removes the race to lodge before places run out.

Consider a buyer who has saved $40,000 and wants to purchase in Halls Head. Under the scheme, they can borrow without LMI at a 5% deposit, provided the property is within the cap and they meet lender serviceability requirements. The absence of an income cap means buyers earning above the previous threshold can still access the guarantee if they meet all other criteria. Applications are made through participating lenders, not directly to Housing Australia, so the range of home loan options available depends on which lenders are on the panel and what products they offer under the scheme.

Property Price Caps That Apply in the Peel Region

For WA, the $850,000 cap applies to Perth and applicable metropolitan postcodes; buyers must confirm the applicable cap with their participating lender using the postcode search tool at firsthomebuyers.gov.au. Mandurah postcodes fall within this metropolitan definition, so the $850,000 cap applies to both the purchase price and the lender's assessed value of the home. Both figures must be at or below the cap.

A buyer looking at a property listed at $825,000 in Lakelands might meet the price test, but if the lender's valuation comes back at $860,000, the application will not proceed under the scheme. This creates a planning issue for buyers in suburbs where advertised prices sit close to the cap. You cannot assume a contract price below $850,000 will qualify. The valuation ordered by your lender is the number that determines eligibility, and valuations can come in higher or lower than the contract price depending on recent sales and property condition.

Help to Buy and How Equity Sharing Works

The Help to Buy scheme opened to applicants on 5 December 2025 and is administered by Housing Australia. The Australian Government contributes up to 40% of the purchase price for a new home and up to 30% for an existing home in exchange for a proportional equity stake. From 1 July 2026, income limits are $103,000 for individual applicants and $165,000 for joint applicants or single parents. Up to 10,000 places are available in the 2026-27 financial year.

In a scenario where a single buyer earning $95,000 wants to purchase a new townhouse valued at $700,000, the Government could contribute up to $280,000 in exchange for 40% equity. The buyer would need a minimum 2% deposit, or $14,000, and would borrow the remaining $406,000. The buyer owns 60% of the property and is responsible for all loan repayments, rates, maintenance and insurance. When the property is sold or the buyer chooses to buy out the Government's share, the Government receives 40% of the sale price or valuation at that time. If the property has increased in value, the Government's share increases proportionally. If it has fallen, the Government's share falls.

Help to Buy cannot be combined with the 5% Deposit Scheme. Buyers need to decide which structure suits their circumstances. The equity share model reduces the loan amount and monthly repayments but limits the capital gain you retain when you sell. The 5% Deposit Scheme requires no equity share but requires a larger loan and repayment commitment. Both schemes can generally be used alongside state stamp duty concessions, though restrictions vary.

Western Australia Stamp Duty Concessions From May 2026

The WA Government removed the geographic distinction between Perth Metropolitan, Peel and regional areas for the First Home Owner Rate of duty from 7 May 2026. A single statewide threshold now applies: no duty is payable on homes valued up to $600,000, and a concessional rate applies on homes valued between $600,001 and $800,000, at a rate of $16.15 for every $100 or part thereof above $600,000. The maximum dutiable value to access the concession is $800,000.

For a Mandurah buyer purchasing an established home valued at $750,000, the duty calculation is $16.15 per $100 on the amount above $600,000. That is $150,000 above the threshold, which translates to a duty bill of $24,225. Without the concession, standard duty on a $750,000 home in WA would be considerably higher. The concession applies to all first home buyers across the state, whether purchasing in Mandurah, Broome or anywhere in between. The change benefits buyers in the Peel region particularly because the previous metropolitan cap was lower.

The First Home Owner Grant in WA remains at $10,000 for new homes only, with a value cap of $800,000 south of the 26th parallel. Mandurah falls well south of that line. The grant does not apply to established homes. Eligibility for the stamp duty concession is not linked to the grant cap, so first home buyers can access duty relief on properties valued above $800,000 provided the value does not exceed the duty concession cap.

Negative Gearing Rules That Start in the 2027-28 Income Year

From the 2027-28 income year, losses related to established residential investment properties purchased after 7:30pm AEST on 12 May 2026 are deductible only against other income from residential properties, including capital gains. Excess losses can be carried forward to offset residential property income in future years. Properties held at 12 May 2026 and new builds purchased after that date are not affected.

For a Mandurah buyer considering an investment loan on an established unit in Greenfields, this means rental losses from that property can no longer be deducted against salary income when lodging a tax return. If the property makes a $5,000 loss in a financial year, that loss is quarantined and can only be used to reduce tax on future rental income or on the capital gain when the property is sold. The buyer will need to fund the shortfall from after-tax income, which affects serviceability and cash flow.

New builds are exempt. A buyer purchasing a newly constructed townhouse in Meadow Springs after 12 May 2026 can still deduct rental losses against all income. This creates a clear difference in after-tax return between new and established investment properties, and it changes the way lenders assess borrowing capacity for investors. If you are purchasing an established property as an investment, your broker will model repayments without the benefit of negative gearing deductions to confirm you can service the loan from net income alone.

Capital Gains Tax Indexation From 1 July 2027

From 1 July 2027, the 50 per cent CGT discount for individuals, trusts and partnerships on residential property is replaced by cost base indexation and a 30 per cent minimum tax rate on capital gains accruing from that date. Investors index the cost base of their assets in line with inflation and pay tax on above-inflation profits only. For investors in new builds, both the existing 50 per cent discount and the new indexation arrangements are available as a choice at the time of disposal.

This affects how you calculate the taxable gain when you sell an investment property. Under the previous rule, you paid tax on 50% of the nominal gain. Under the new rule, you adjust the purchase price upward in line with inflation, then pay tax on the real gain at a minimum 30% rate. The real tax outcome depends on your marginal rate, the rate of inflation, and how long you hold the property. For buyers entering the market now with a long-term hold strategy, the indexation model may reduce tax on sale compared to the discount model in high-inflation environments. New build investors can choose whichever method produces the lower tax bill.

How Lenders Apply the Serviceability Buffer and Debt-to-Income Limits

APRA requires all authorised deposit-taking institutions to assess new borrowers' capacity to service a home loan at an interest rate that is at least 3.0 percentage points above the loan product rate. The buffer applies to new borrowers only and has remained at 3.0 percentage points since October 2021. A buyer applying for a variable rate loan with a product rate of 6.2% will be assessed at 9.2%.

APRA activated a DTI lending limit on 27 November 2025, effective from 1 February 2026, applying to all ADIs. Each ADI may lend up to 20 per cent of new owner-occupier loans and up to 20 per cent of new investor loans to borrowers with a total DTI ratio of six times or greater. For a couple with a combined gross income of $140,000, a DTI ratio of six times would be a total loan amount of $840,000. If they are purchasing an established home in Mandurah valued at $750,000 with a 10% deposit, their loan amount would be $675,000, which sits comfortably within the limit. If they are refinancing existing debt and topping up, or purchasing at a higher price point, they may approach or exceed the six times threshold, at which point the lender will need to manage the application within its quarterly allocation for high-DTI lending.

These settings apply to loans from banks, credit unions and building societies regulated by APRA. Non-ADI lenders are not currently subject to the DTI limit, though APRA holds powers to extend the rules if required. When comparing home loan rates, it is worth understanding whether the lender is an ADI and whether your income and loan amount combination might trigger a DTI assessment.

Using the First Home Super Saver Scheme to Build a Deposit

The FHSS Scheme allows first home buyers to make voluntary concessional and non-concessional contributions into their superannuation fund and apply to release eligible amounts toward a home deposit. Up to $15,000 of personal contributions from any one financial year can be released, with a total cap of $50,000. Concessional contributions are taxed at 15% rather than at marginal income tax rates.

A buyer on a marginal tax rate of 32.5% who salary sacrifices $15,000 into super pays $2,250 in tax on that contribution instead of $4,875. Over three years, they could build a $45,000 deposit inside super and release it through the FHSS Scheme, saving $7,875 in tax compared to saving the same amount outside super. Buyers generally need to obtain a determination from the ATO before signing a purchase contract. The scheme works alongside other government support, so a buyer using the FHSS Scheme can still apply for the 5% Deposit Scheme or Help to Buy, provided they meet all eligibility criteria for those programs.

Call one of our team or book an appointment at a time that works for you. We work with buyers across Mandurah and the Peel region and can walk through which combination of schemes, concessions and loan structures fits your income, deposit and property type. Government policy settings change regularly, and the difference between a 5% deposit with LMI waived and a 2% deposit with equity share can be significant depending on your circumstances and what you are purchasing.

Frequently Asked Questions