RSM New Zealand

Need help securing your first home?

The question of property is on everybody’s lips – talk of speculators, developers, property investors, frustrated potential purchasers looking to get their foot onto the property ladder – the chatter is endless. For those looking to buy their dream home there are many questions; Where will I buy, when is the right time to buy and fundamentally, how will I fund the purchase of my dream home given the current market?

If you are genuinely looking to secure your first home, is there any help available? If you have been in KiwiSaver for three years or more there may be some options available to help fund the purchase of your first home.

KiwiSaver Home Start Grant

There are two Home Start grants, the existing home and new home grant, available to individuals who meet the criteria.

Criteria

To be eligible for a KiwiSaver Home Start grant an individual must:

  • Be 18 years or over.
  • Have been contributing the required minimum amount to KiwiSaver for at least three years.
  • Be purchasing or building your first home which is in New Zealand.
  • Have a household income (before tax) of less than $80,000 per year (for one person), or less than $120,000 per year (for two or more people).
  • Have a deposit that is 10% or more of the purchase price, including the addition of the grant.
  • Be planning to live in the house for at least 6 months from the settlement/completion of the property.
  • House price caps will apply.

Amount of Grant

KiwiSaver

(Period of time in KiwiSaver)

Existing Home

New Home

(a property bought off the plans or land to build a new home on)

 

Grant Per  Person

Grant Per Person

3 Years

$3,000

$6,000

4 years

$4,000

$8,000

5 Years or more

$5,000

$10,000

Eligible couples can double the grant amounts above e.g. a couple who want to purchase an existing home and have contributed to KiwiSaver for 5 years or more can avail of $10,000 under the grant ($5,000 per person).

However, regardless of the number of eligible purchasers, the maximum value of the grant payable for the purchase of a single dwelling is $10,000 for the purchase of an older/existing property and is $20,000 for the purchase of a new property.

KiwiSaver Withdrawal

Under the Grant, an individual may be able to withdraw some or all of their KiwiSaver savings to put towards purchasing their home (subject to leaving a minimum balance of $1,000 in your account).

Criteria

  • Have been contributing the required minimum amount to KiwiSaver for at least three years.
  • Be purchasing or building your first home which is in New Zealand. In limited circumstances individuals who have previously owned a home may qualify as a first time owner. An assessment is carried out by Housing New Zeland to determine if an individual is in the same financial position as a first home buyer.
  • You intend to live mostly in the house that is being purchased.

What can you With-draw?

Effective from 1 April 2015 the KiwiSaver withdrawal may include:

  • Members Contributions
  • Returns on Investment(s) received
  • Employer Contributions (voluntary and compulsory)
  • Member Tax Credits

Note funds transferred from an Australian Complying Superannuation scheme cannot be withdrawn for the purchase of a home.

Welcome Home Loan

For many home buyers, finding the minimum 20% deposit most lenders will look for prior to granting a normal home loan can be difficult. With a Welcome Home Loan you only need a 10 percent deposit. The maximum loan amount you can borrow with a Welcome Home Loan is limited to the house price caps outlined below.

Criteria

In order to be eligible for a welcome home loan an individual must;

  • Have a household income (before tax) of less than $80,000 per year (for one person), or less than $120,000 per year (for two or more people).
  • Contributed to KiwiSaver for more than 3 years.
  • Have a deposit that is 10% or more of the purchase price, including the addition of the grant.
  • Not own any other properties.
  • Are purchasing the house as your home i.e. for owner occupation.

House Price Caps for Home Start Grant and Welcome Home Loan

The purchase price of the house for the purpose of the Home Start Grant and Welcome Home Loan will have to be within the capped limits outlined below.

Location of house

Cap

Auckland

$550,000

Wellington and Queenstown

$450,000

Christchurch and Selwyn District

$450,000

Hamilton, Tauranga, Western Bay of Plenty, Kapiti Coast, Upper Hutt, Hutt City, Porirua, Tasman, Nelson & Waimakariri

$450,000

All other areas

$350,000

The above is intended as general guidance on the potential options available to help fund the purchase of your first home and does intend to provide financial advice in relation to mortgages or otherwise. If you need specific advice please speak to your accountant or financial adviser.

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