First home buyers may be struggling in recent times with the Reserve Bank limiting the amount of money banks can lend to people with less than a 20% deposit.
10 Nov 2015
Coupled with rising house prices, buying a home can seem impossible. But there’s good news for first home buyers who now have several options available to them thanks to the KiwiSaver changes. Under the old rules you could only take out any savings that either you or your employer contributed (including any returns). In contrast, rules introduced in 1 April 2015 allow you to access the government’s contributions, with the exception of the initial $1,000 kick-start contribution. This is available regardless if you buy new or build, and there are no limitations on property value. Eligibility criteria apply, including the requirement that you have been a member of a KiwiSaver scheme for a minimum of three years.
In addition to KiwiSaver enhancements, another option is available for first time buyers through Housing New Zealand to help fund their home deposit. This is a separate application with a separate set of criteria. The new rules for this initiative state you could be eligible for the KiwiSaver HomeStart grant if you earn less than $80,000 (for singles) or $120,000 (for couples) and the purchase price of the home is under $450,000.
If you’ve been a KiwiSaver contributor for three years and are purchasing an existing home, you could be eligible for a $3,000 grant. This increases to $4,000 or $5,000 if you have been a KiwiSaver contributor for four or five years respectively. Further, if you buy or build a new home, the grant value doubles.
Now that you have additional access to a healthier deposit, it’s crucial you get accurate advice tailored to your own individual circumstances. Your local Mike Pero Adviser will be happy to discuss your options to help figure out the best way forward.
Disclaimer: Approved applicants only. Lending criteria applies.