"Eligible first home buyers will be able to access the 5% deposit scheme, removing income and place caps." - Alex Kenward, Finance Manager

All first home buyers will soon be able to enter the property market with just a 5% deposit on the back of sweeping changes to the Home Guarantee Scheme.

Income caps and limits on places under the scheme will be scrapped as of 1 October, Prime Minister Anthony Albanese announced on Monday.

The change means all first home buyers – regardless of income – will be able to access the scheme, which allows property purchases with as little as a 5% deposit without paying for Lenders Mortgage Insurance (LMI). 

Previously, only 50,000 places were offered each financial year, with singles earning more than $125,000 and couples on more than $200,000 deemed ineligible.

"Labor was re-elected with a clear mandate to bring down the deposit hurdle for first home buyers, and we're delivering," Mr Albanese said.

It comes just one day after the government announced it would be pausing aspects of the National Construction Code to allow for faster construction activity.

“Yesterday we announced reforms to unlock tens of thousands of new homes and today we’re announcing changes to help tens of thousands of first home buyers get into home ownership,” Housing Minister Clare O'Neil said.

The scheme's property price caps will also rise substantially on 1 October.

Buyers in Sydney will soon be able to spend as much as $1.5 million – up from $900,000 – while those in Brisbane can access the scheme on properties worth $1 million – up from $700,000.