Good news for first home buyers
A series of changes are set to kick in for first home buyers from 1 April 2015 with the introduction of KiwiSaver HomeStart. The new first home buyer packages have been designed to help people achieve the dream of buying their own home. There will be three main changes coming into effect that I’ve outlined below.
An increased grant for newly built homes
The KiwiSaver First Home Deposit Subsidy will be replaced with a KiwiSaver HomeStart Grant which doubles the contributions for buying newly built homes.
Like the current subsidy, KiwiSaver HomeStart will continue to provide eligible first home buyers with a grant of up to $5,000 for individuals and up to $10,000 for couples to put towards a deposit for an existing home.
In addition, the new KiwiSaver HomeStart grant will provide eligible first home buyers with a grant of up to $10,000 for individuals and up to $20,000 for couples to help with the costs of building or purchasing a brand new home.
A new home can include:
A vacant residential section on which a new home will be built
A house and land package purchased off the plans
A new apartment purchased off the plans
A newly built property, that has received its building code compliance certificate less than six months before the date of the buyer’s application.
Larger KiwiSaver withdrawals will be possible
Under the current rules, first home buyers can withdraw all funds from their KiwiSaver account except the member tax credit and the government’s $1,000 kick-start contribution.
The new changes will allow first home buyers to also withdraw the member tax credit which is the Government’s contribution to members’ KiwiSaver savings.
Increased house price caps expand eligiblibility
The income thresholds for grants and Welcome Home Loans has not changed ($80,000 for a single buyer) however the house price cap has increased so more first home buyers will be eligible for the scheme.
The house price caps for grants and Welcome Home Loans vary for each region:
Auckland cap: $550,000
Hamilton City, Tauranga City, Western Bay of Plenty, Kapiti Coast, Porirua City, Upper Hutt, Hutt City, Wellington City, Nelson City, Tasman, Waimakariri, Christchurch City, Selwyn District, Queenstown Lakes: $450,000
All other areas: $350,000.
If you would like to purchase your own home the upcoming changes to KiwiSaver could mean getting into your first home sooner.