Your Guide to the New Home Guarantee Scheme in WA

Buying your first home is one of the most significant steps many Western Australians will ever take. That’s why it’s worth understanding how the recently expanded federal scheme, known widely as the Home Guarantee Scheme (HGS) and the Australian Government 5% Deposit Scheme, can potentially help you into home ownership sooner and more affordably here in Western Australia. 

What is the Home Guarantee / 5% Deposit Scheme? 

The Australian Government’s 5% Deposit Scheme is the next evolution of the Home Guarantee Scheme. It enables eligible first home buyers (and other eligible buyer types) to purchase or build a home with a deposit as low as 5 per cent, rather than the traditional 20 per cent, by the Government providing a guarantee to the lender.  

Key benefits: 

• Minimum deposit of just 5% for many buyers.
• No income caps for many applicants under the expanded scheme. 
• Unlimited places available under the scheme (i.e., no set quota per year). 
• Avoidance of lenders mortgage insurance (LMI) for eligible participants. 
• Broad variety of home types eligible – houses, apartments, off-the-plan, house-and-land, or building on vacant land. 
  

What this means for WA home buyers 

If you’re looking at buying in Western Australia, these changes make the scheme much more accessible and meaningful. 

Property price caps in WA 

Under the expanded scheme (from 1 October 2025) the property price cap for the capital city area in WA (i.e., Perth metro) is $850,000. For “other areas” in WA (regional) the cap is $600,000.  

Both the purchase price and the home's value (as assessed by your Participating Lender) must be at or below the cap. For building a new home on vacant land with separate contracts, the total land price plus build costs need to come in under the cap too. 

Deposit and cost savings 

With a 5% deposit, you need to save much less up-front. For example, on an $800,000 home, 5% is $40,000 rather than $160,000 for a 20% deposit. On top of that, avoiding LMI can save tens of thousands more.  

Local WA schemes you can combine 

While the federal scheme provides the deposit guarantee, WA buyers may also be eligible for state-based incentives such as: 

• The First Home Owner Grant (WA) (FHOG) – $10,000 for eligible new homes in WA.
• Stamp duty concessions for first-home buyers in WA (varies by value and location). 

That means you could potentially combine the federal 5% deposit scheme with the FHOG and stamp duty savings to significantly reduce your up-front cost. 

Who is eligible? 

Federal eligibility highlights 

You must: 

• Be an Australian citizen (or certain permanent residents) aged 18 or over. 
• Be a first home buyer (or in some cases have not owned property in Australia for the past 10 years). 
• Have saved a deposit of at least 5 per cent.  
• Be purchasing or building a home you will live in (owner-occupier).
• Be purchasing within the applicable property price caps for your location. 
• Apply via a participating lender (i.e., you cannot apply directly to the Government). 
  

Points to note for WA 

• The higher property cap ($850k) means a far broader range of homes in Perth now qualify.
• Just because you meet the scheme criteria doesn’t guarantee loan approval—your lender will still assess your servicing capacity, credit history and other usual loan conditions.
• Regional WA buyers will have different property-cap thresholds (e.g., $600k for non-metro).
• Combining the federal scheme with WA state incentives may give you the best value. 
  

Steps to applying 

Here’s a practical path you can follow: 

1. Start saving for your deposit and other costs – While the deposit requirement drops to 5 per cent, you’ll still need to cover purchase costs such as stamp duty (if applicable), legal fees, inspections, and settlement costs. 
2. Check your budget and borrowing capacity – Meeting the deposit is one thing; being able to comfortably afford repayments and other housing costs is essential. 
3. Select a participating lender – Use the list available on the official federal site of “Participating Lenders”. 
4. Check the property you are considering falls within the price cap – Confirm the cap for your suburb/postcode via the official tool or the lender. 
5. Secure pre-approval or eligibility assessment – This gives you the green light to start searching in your price band. 
6. Find the home and sign a contract – Once eligible you proceed to secure the property, subject to lender approval and all conditions. 
7. Move in and meet ongoing obligations – Since the guarantee is based on owner-occupation, you’ll need to live in the property for a certain period and meet your loan repayment obligations. 

If you’re looking to buy your first home in Western Australia, the expanded Home Guarantee or 5% Deposit Scheme offers a practical and achievable pathway into home ownership. By reducing the deposit required and expanding property price caps, the scheme opens up a wider range of home options across both metropolitan and regional WA, helping first home buyers take their next step sooner. 

At Cedar Woods, we plan and deliver thoughtfully designed communities that support first home buyers at every stage of their journey. Communities such as Eglinton Village in Perth’s north and Millars Landing in Perth’s south offer a range of home opportunities within well-located, masterplanned neighborhoods, giving first home buyers the flexibility to choose a home that suits their lifestyle and budget.