We now know when the 'Help to Buy' scheme will start. Could it help you?

Labor has revealed when a key scheme to help you buy a home will start. Here's what you need to know.

Prime Minister Anthony Albanese says Labor's 'Help to Buy' scheme will begin next year. Source: AAP / Jono Searle

KEY POINTS:

• Anthony Albanese says Labor's 'Help to Buy' scheme will begin next year.
• The government would contribute up to 40 per cent of a house purchase price.
• The plan was a key promise before last year's election.

Prime Minister Anthony Albanese has revealed the federal government's Help to Buy housing scheme will come into effect next year.

Albanese met with state and territory leaders at National Cabinet on Wednesday, announcing an intent to construct 1.2 million new homes over five years to address the national housing crisis.

Addressing Labor's national conference in Brisbane the following day, he revealed discussions had also paved the way for Labor to implement a key election promise in 2024.

Under the scheme, the government contribute up to 40 per cent of the cost of a new home. Source: AAP / Paul Miller

"So often Australians have done all the right things. They've worked hard. They've saved up. They've made sacrifices. But a deposit for a home is still out of reach," he said.

"What our government will do is step up and put in our share. Opening the door of home ownership."

The Help to Buy scheme aims to help lower and middle income-earners enter the housing market with a much smaller deposit.

So how does it work, who does it help, and how much could they save?

Here's what you need to know.

How does the Help to Buy scheme work?

The government would step in to cover 40 per cent of a new build's purchase price - 30 per cent for a pre-existing home.

Buyers will also have lenders mortgage insurance waived, potentially saving over $30,000. They won't need to pay rent on the stake owned by the government.

The scheme will apply to 10,000 houses every year and buyers will have to live in the home.

How much money would it save?

Depends on where you are.

There'll be caps which reflect the cost of homes in each state, and also the difference between metro and rural areas.

In NSW, where property prices are particularly high, it'd be capped at $950,000 in Sydney and regional hubs. That means buyers there could save $380,000 on a new build, and $285,000 on a pre-existing house.

But the cap drops to $600,000 in the rest of the state, given homes in the regions are comparatively cheaper.

In Victoria, it will apply to homes costing up to $850,000 in Melbourne and regional hubs, and $550,000 in the rest of the state.

Who's eligible for the Help to Buy scheme?

Single Australians earning up to $90,000, or couples with a combined income of $120,000.

They'll need to have a 2 per cent deposit on hand, and qualify for a standard home loan for the remainder of the purchase.

It doesn't need to be the first time they've bought a property, but they can't currently own one.