What Government Incentives Mean for Buyers This Year

And how to use them strategically (without overpaying)

If you’ve been watching the property market lately, you’ve probably noticed one thing: government incentives are back in the conversation.

From first home buyer schemes and stamp duty concessions to shared equity programs and policy announcements designed to “help affordability,” buyers across Melbourne are asking the same question:

Do these incentives actually help… or do they just push prices higher?

The truth is: government incentives can be valuable but only if you understand how they work, who they’re designed for, and how they affect the broader market.

Because while incentives often improve access to property ownership, they can also create unintended consequences. And for many buyers, the real risk isn’t missing out on a scheme. it’s buying the wrong property, at the wrong price, in the wrong conditions.

This year, being informed and strategic matters more than ever.

Why Government Incentives Exist

Government incentives are usually introduced with one key goal in mind:

To make property more accessible for buyers

Particularly:

  • First home buyers

  • Low-to-middle income households

  • Essential workers (in some programs)

  • Buyers struggling to save a full deposit

Most incentives aim to reduce one of the major barriers to entry, whether that’s deposit size, upfront costs, or stamp duty.

In theory, this sounds great. And in many cases, it genuinely is.

But property markets are driven by supply and demand. And when incentives increase the number of buyers who can suddenly afford to purchase, the competition often rises too.

The Most Common Government Incentives Buyers Will See This Year

While incentives can vary depending on your situation, income, and property type, most buyers will fall into one of the following categories.

1. First Home Buyer Grants

First home buyer grants can provide a direct financial boost, often used to support deposit funds, cover moving costs, or help buyers get into the market sooner.

However, these grants often come with restrictions such as:

  • purchase price caps

  • property type limitations (new builds vs established homes)

  • owner-occupier requirements

They can be helpful, but buyers should be careful not to stretch themselves beyond what they can comfortably afford just because a grant is available.

2. Stamp Duty Concessions

Stamp duty remains one of the biggest upfront costs when buying property in Victoria.

Stamp duty concessions or exemptions can be extremely valuable, and for some buyers, they can make the difference between purchasing now or waiting years.

For eligible buyers, stamp duty savings can amount to tens of thousands of dollars, depending on the purchase price.

But it’s important to remember:
stamp duty concessions don’t reduce the property price, only the cost of entering the market.

That distinction matters.


3. Shared Equity Schemes

Shared equity schemes are increasingly discussed and promoted because they reduce the deposit barrier by allowing buyers to purchase with government support.

In simple terms, the government co-owns a portion of the property, meaning buyers need a smaller loan and smaller deposit.

For example:

  • you buy 70–80%

  • the government holds 20–30%

  • you can buy out the remaining share later

This can be a pathway into home ownership, but it also comes with long-term considerations, including:

  • restrictions on the type of property you can buy

  • income caps

  • limitations on selling

  • future repayments when you buy out the government’s share

For the right buyer, shared equity can be an excellent stepping stone. But it’s not always the best solution if you’re in a position to buy independently.

4. Deposit Guarantee Schemes

Deposit guarantee schemes allow eligible buyers to purchase with a smaller deposit (often 5%) without paying Lenders Mortgage Insurance (LMI).

This is one of the most impactful incentives available because it reduces the time it takes buyers to enter the market.

For many first home buyers, saving a 20% deposit in Melbourne feels almost impossible, and this scheme is designed to remove that hurdle.

But as with all incentives, buyers still need to be realistic about repayments, rate rises, and affordability over the long term.


So the real question is, do incentives help buyers or push prices up? Government incentives almost always create more buyers in the market, especially in the lower-to-mid price brackets.

That means:

  • more competition

  • more demand

  • faster sales

  • stronger auction results

  • and often, upward pressure on prices

Incentives don’t increase supply, They increase purchasing power.

And when multiple buyers can suddenly afford the same properties, those properties often become more competitive and ultimately more expensive.

This is why incentives can feel like a double-edged sword:

  • they help buyers enter the market

  • but they can also raise the entry point

So yes, incentives help, but they can also contribute to price growth in the segments they target most.

If you need a hand navigating the ever changing conditions of the Melbourne property market, we are here to help!

Dianne Kristel Catindoy