The Family Home Guarantee aims to support eligible single parents with dependents to purchase a home, by guaranteeing a participating lender up to 18 per cent of a purchase price - giving the ability to purchase a property for a deposit as small as two per cent.

But, under the scheme capital cities and regional areas (places with a population of 250,000 or more) have a higher price threshold.

Parents in Hobart can access the scheme for a home up to $400,000 - but Launceston is classed as "rest of state", with a threshold of just $300,000.

A property search on Monday showed just 25 homes in the greater Launceston region that met that criteria - with the majority not meeting basic bedroom requirements for families.

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"Whilst the announcement looks great, once you delve into the nitty gritty of it all, it certainly needs some work," Launceston-based financial advisor Toby Mahoney said.

"That's the problem with it - it comes out and it's presented like it's a fantastic opportunity, which it certainly is, but in reality within anywhere ... most places now across Australia, anything under $300,000 you're not going to get anything that's suitable for a small family".

A property search undertaken by Mr Mahoney showed 25 properties available in the Launceston region with a listing under $300,000.

Twelve of those properties were asking for offers $275,000 or above - which Mr Mahoney said were "more likely" to go for over $300,000 due to the current market.

Two of the properties only had one bedroom, which he said would not realistically work for a single parent family.

That leaves 11 properties available, nine of which are two-bedroom properties.

"There's potentially two options for any single parent within Launceston that has more than one child under the $300,000 mark and that place, you're still going to need to do some work to it," Mr Mahoney said.

With Tasmania's smaller population, Mr Mahoney said it the scheme would be able to reach more people if the price threshold was increased across to the same amount as Hobart.

"It would get them into a property sooner, which is really what this scheme is all about."

The necessary legislative changes are not yet in force, meaning the final form of the scheme may differ from current outlines.

Federal housing and homelessness spokesperson Jason Clare said the cap must be raised.

"If this policy doesn't work in the marginal seat of Bass, which the government is desperately trying to hold onto, then where does it work?," he said.

"I'll give them a week. Once they realise this policy won't work for the people of Northern Tasmania they'll be forced to backflip".

Bass Liberal MHR Bridget Archer said the price cap was consistent with the First Home Loan Deposit Scheme.

"It's a competitive market in northern Tasmania right now, there is no denying that and the government understands that saving for a deposit is a constraint on home ownership for Australians, more so than the ability to service a home loan," she said.

"For a single parent families, saving for a 20 per cent deposit is a significant challenge while raising children.

"The Family Home Guarantee will provide a limited, first loss guarantee to participating lenders ... this means the Government will provide a guarantee of up to 18 per cent of the deposit under the Family Home Guarantee so that lender's mortgage insurance does not need to be paid, saving single parent families a significant amount of money and helping them achieve home ownership".

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