The federal government's Help to Buy scheme finally passed through parliament in the last week of November offering home ownership hope to 40,000 low and middle income Australians.

The Greens finally threw their support behind the scheme after holding up the passage of the legislation for much of 2024.

Under the scheme buyers will enter into an "equity contribution" with the government of up to 40 per cent of the cost of new homes and 30 per cent of existing homes.

Buyers need a minimum 2 per cent deposit and will only pay the mortgage on their share of the property. Mortgages can only be approved with a select list of lenders approved by Housing Australia, which will administer the scheme.

The government hopes the scheme will help 40,000 low and middle income families buy a home with houses, townhouses and units all eligible. Participants must live in the property and not currently own any land or other property in Australia or overseas.

When the property is sold the government will recoup its investment through a share of the capital gain.

In Victoria the price cap is $850,000 for Melbourne and other big regional centres like Geelong, Ballart and Bendigo and $650,000 in the rest of the state.

For their support, the Greens extracted a promise of an extra $3 billion for social housing.

"We know how difficult it is saving up for your first home. Help to Buy means a smaller deposit to help low and middle income Australians get on the housing ladder sooner," said housing minister Clare O'Neil.

While cautiously welcoming the scheme as another way of helping families onto the property ladder, KR Peters Director Peter Nicolls said he would like to see first home buyers given reduced housing interest rates for the first five years.

"A lower interest rate for five years would encourage first home buyers to save a deposit and give them hope that a property was affordable for the first five years while they built up equity," he said.

"The banks are making billions of dollars profit. They don't care about how poor first home buyers are going to get finance or qualify for loans."

He is also concerned that a small deposit like 2 per cent does not encouraged the disciplined, long term savings behaviour needed to service a mortgage.

He cautioned anyone thinking of taking advantage of the scheme to read the fine detail and talk to property professionals like the team at KR Peter for advice.

"This could work for some buyers, but the cap means the scheme will be more useful for those wanting to buy units and townhouses in the lower price range, especially in Melbourne."

To discuss this and other government schemes designed to help first home buyers and those on lower incomes speak to the team at KR Peters  Officer 5943 1111 or Wantirna South 9800 0000.