Massive First Home Buyer Boost: Higher Caps, No Income Limits

If you’ve been waiting for a better chance to step into the property market, the October 2025 updates to the First Home Buyer scheme might be the turning point. With removal of previous caps, higher price limits, and broader eligibility, this reform could reshape how first home buyers – and even property investors – approach the market.

In this article, based on Episode 229 of the Australian Property Investment Podcast, we dive into what’s changed, why it matters, and exactly what you need to do next.

What’s Changed in the First Home Buyer Scheme

Removal of Place and Income Caps

• Place caps are gone. Previously, there were limits on how many applicants could access the scheme; these restrictions have been lifted.
• Income caps removed. If you thought your household earnings disqualified you, the new rules are more inclusive. Trades, dual-income households, and higher earners can now be in the mix.
  

Higher Price Caps Across States

The scheme’s property price ceilings have been lifted substantially. Below are some examples of what first home buyers can now aim for:

These changes give more flexibility in the choice of neighbourhood, property features, and lifestyle.

What This Means for First Home Buyers

More Options, More Freedom

With higher caps and lifted restrictions, many buyers can now consider suburbs or property types that were previously out of reach. You might afford something closer to work, better transport, or with more land.

Rising Competition… Including From Investors

First home buyers have often competed with investors and other buyers for entry-level homes. Greater eligibility tends to increase demand. That could mean a tighter market, faster decision making and sharper negotiation skills will count more than ever.

The True Cost of Buying in 2025

Just because the caps are higher doesn’t mean costs disappear. Understanding all the associated costs is crucial.

Deposit, Stamp Duty & Other Upfront Costs

Let’s take a Sydney example. If you buy near the $1.5 million cap, here’s what your upfront costs could look like:

• Deposit (5%) – $75,000
• Stamp Duty – roughly $65,000 (if buying above $1 million in NSW you pay full stamp duty)
• Legal, inspection & conveyancing costs – approx. $3,000

That means you’d need around $143,000 upfront to secure the property. This is just under 10% of the total purchase price once you factor in all costs, which is why planning early and saving consistently is critical.

To comfortably service the loan on a $1.5M property, you’d generally need a combined household income of around $250K–$260K per year (or roughly $125K each for a dual-income household). This will vary depending on your other debts and expenses, but it’s a solid benchmark to work from.

Now let’s look at a Perth example. If you’re looking at Perth’s upper price cap of $850,000, the numbers look far more accessible:

• Deposit (5%) – $42,500
• Stamp Duty – approx. $35,000 (Perth stamp duty is slightly lower than NSW, but still significantly above $430K)
• Legal, inspection & conveyancing costs – approx. $3,000

Your total upfront costs would be around $80,000–$82,000.

For an $850K purchase, you’d typically need a combined household income of around $145K–$155K to comfortably service the loan, which makes Perth one of the more affordable capital cities for first home buyers who qualify under the new scheme.

What Income You’ll Likely Need

With higher price caps, the income required won’t be small. Dual earners or strong savings will give you much better options. Planning your borrowing power, factor in living costs, rates, repayments, and a buffer for unexpected expenses.

Not sure what you could borrow under the new scheme? Get in touch with our team to calculate your borrowing power and create a clear strategy. Knowing exactly where you stand puts you in a stronger position when you find the right property.

Common Mistakes First Home Buyers Should Avoid

Why Acting Now Gives You an Edge

Because the policy changes are already in motion, those who move early tend to benefit most. Here’s how:

• Being prepared (finances in order, pre-approval secured) means you can move quickly.
• Sellers and agents may respond more favourably to buyers who can show readiness.
• Delaying could mean missing further market rises, increasing deposit or stamp duty burdens, or rising interest rates.

How to Prepare & Plan

Understand Your Budget

Work out what you can borrow, and what repayments will look like. Include all costs: deposit, fees, insurance, maintenance.

Get Pre-approval

Having conditional approval from a lender gives you confidence, speed, and stronger negotiating power.

Research Suburbs with Future Growth

Don’t just chase price; look at infrastructure, jobs growth, transport links. These affect long-term value.

Build a Trusted Advisory Team

This includes a good mortgage broker, property valuers or buyers’ agents, legal experts, and financial advisers. You want support across every step.

Key Takeaways

• October 2025 brings no income caps, no place limits, and higher price caps, opening the door for thousands of first home buyers.
• Expect more competition – acting early with pre-approval will give you a serious edge.
• Understanding the true cost of entry, including deposit, stamp duty, and required income, is critical for confident decision-making.
  

Next Steps

If you’re serious about buying in the next 12 months, now is the time to prepare:

1. Listen to Episode 229 of the Australian Property Investment Podcast for a full discussion on these changes.
2. Book a strategy session with Atelier Wealth to find out your exact borrowing power.
3. Get pre-approval so you can move fast when the right property appears.
4. Read The Happy Home Loan Handbook to get foundational insights and prepare your mindset and finances for success.

For many first home buyers, the October 2025 reforms are more than just policy tweaks – they’re a genuine chance to make home ownership more accessible. But opportunity alone isn’t enough. Preparation, speed, informed decisions and the right support network are what turn possibility into reality.

At Atelier Wealth, we believe that you should not only see what’s possible – you should feel confident stepping forward.