The government’s KiwiSaver support package for first home buyers came into effect on 1 April. It’s intended that this will help 90,000 lower and middle income people into home ownership over the next five years. As house prices continue to increase relative to incomes, these changes will go some way into keeping the Kiwi dream of home ownership alive.Here’s a quick summary of the changes:
1. Get up to $10,000 for building new
The KiwiSaver First Home Deposit Subsidy has now been replaced with the KiwiSaver HomeStart grant.
If you’re purchasing an existing/older home, the HomeStart grant is $1,000 for each year of contribution to the Kiwisaver scheme – to a maximum of $5,000.
If you’re purchasing a new home off the plans/building new, the HomeStart grant is $2,000 for each year of contribution to the scheme – to a maximum of $10,000.
A home which received its building code compliance certificate less than six months before making your HomeStart application is considered a new home.
2. Increased price limits
You can now apply for a HomeStart grant when buying properties up to $450,000 in Christchurch (up from $400,000 previously).
You’d be surprised as to how much that extra $50k would go in widening your options – in certain parts of the city, it could mean an extra bathroom, ensuite or even a second living area. The increased price limit also extends to the Waimakariri and Selwyn districts – and there is good value to be had there.
Eligibility for Welcome Home Loans has also been extended to be in line with these new price limits.
3. Bigger withdrawals from your KiwiSaver fund
Member tax credits can now be withdrawn from your KiwiSaver fund when purchasing your first home. Effectively, first home buyers will now be able to withdraw all of their KiwiSaver savings except the $1,000 kick-start.
No doubt these changes will be well-received by first-home buyers who have been considerably limited by the Reserve Bank’s LVRs. Owning a home is important to Kiwis – it provides the lifestyle, financial security and stability that every family deserves!
Click here for further information about purchasing your first home with KiwiSaver.
Thinking of getting your finances together in order to purchase your first home? Give one of our friendly mortgage advisors a call today.